Rent vs Buy Calculator
Compare renting vs buying a home financially
Buying
Renting
Common parameters
Results are estimates for informational purposes only and do not constitute financial, legal, or medical advice.
This calculator compares the total financial outcome of renting versus buying a home over a chosen time horizon. It accounts for mortgage payments, property taxes, maintenance, home value appreciation, and the opportunity cost of investing your down payment instead of spending it. The result shows the net cost of each option and when buying becomes cheaper than renting.
The decision to rent or buy is one of the biggest financial choices most people make. Buying builds equity and provides stability, but ties up capital and comes with high transaction costs. Renting offers flexibility and liquidity, but provides no equity. This calculator helps you see the full picture over any time period — from 1 to 30 years.
Frequently Asked Questions
What is the break-even point?
The break-even point is the year when the cumulative net cost of buying becomes equal to (and then lower than) renting. Before this point, renting is cheaper; after it, buying wins. It typically ranges from 3 to 10 years depending on local market conditions.
What is "investment return" in the renting scenario?
If you rent instead of buying, your down payment stays with you. This calculator assumes you invest that money at the specified annual return rate, modeling the opportunity cost of tying up capital in a home purchase.
Why can the "net cost to buy" be negative?
If home appreciation is high and you hold long enough, the equity gained exceeds all costs paid (mortgage, taxes, maintenance). In that case, buying generates a net positive return, shown as a negative net cost.
Does this calculator include transaction costs?
No — agent fees, stamp duty/closing costs, moving expenses, and renovations are not included. These typically add 5–10% to the purchase price. Factor them in manually for a precise comparison.
What home appreciation rate should I use?
Historical real estate appreciation in most developed countries averages 2–5% per year. Use local market data for a more accurate estimate. In rapidly growing cities (London, Paris, Vilnius) it can be higher; in stagnant markets it may be near zero.
Is it better to rent or buy in 2024–2025?
With elevated mortgage rates (4–7% depending on country), the break-even point has shifted longer — often 7–12 years in major cities. In areas where rents are high relative to purchase prices, or where you plan to stay long-term, buying still makes sense. In overvalued markets, renting and investing the difference can outperform.
What maintenance rate should I use?
A commonly used rule of thumb is 1–2% of home value per year for maintenance and repairs. Older properties may need more. This covers routine repairs, appliances, roof, plumbing, and periodic renovations.
How does inflation affect this calculation?
Inflation generally benefits property owners: the real value of a fixed mortgage payment decreases over time, while rents typically rise with inflation. Over 20–30 years, this can significantly favor buying, especially in inflationary environments.
Should I include property tax?
Yes, always. Property tax varies widely: in France (taxe foncière) it's typically 0.5–1.5% of property value per year. In the UK there is no annual property tax for owner-occupiers, but stamp duty applies on purchase. In Lithuania the rate is 0.3–3% per year depending on value.
What if I want to move in a few years?
If you plan to stay for less than 5–7 years, renting is almost always better. Transaction costs (agent fees, stamp duty/notary, mortgage arrangement) alone typically amount to 5–10% of property value, requiring years of appreciation just to break even.