Rent vs Buy Calculator
Compare renting and buying year by year: net worth on both paths, the break-even year, with US closing costs or UK Stamp Duty included.
How to Use Rent vs Buy Calculator
- 1Choose where you are. In the UK, pick England/NI, Scotland or Wales and whether you're a first-time buyer, so Stamp Duty, LBTT or LTT is added for you.
- 2Enter the home's price, your down payment or deposit, the mortgage rate and term.
- 3Enter the rent for a similar home and how many years you'd stay.
- 4Open "Owning costs" for closing or legal fees, property tax, insurance, HOA or service charges, maintenance and selling costs, and "Growth and renting" for house prices, rent rises and what your savings would earn.
- 5Read which leaves you better off after the years you chose, the year buying starts to win, and the year-by-year net worth of both.
Frequently Asked Questions
Is it better to rent or buy?
It depends mostly on how long you stay. For a $400,000 home with 20% down at 6.5%, against $2,200 a month rent, with homes and rents rising 3% a year and savings earning 5%, renting is about $18,000 ahead after 5 years. Buying pulls ahead from year 8, and is about $17,700 ahead after 10 years and $174,000 after 20.
What is the rent vs buy break-even point?
It's how long you'd need to stay for buying to leave you better off, once the costs of buying and selling are paid back by equity and price growth. The calculator shows the first year from which buying stays ahead, and marks it in the table.
Which costs of owning do people forget?
Closing costs when you buy (often 2–5% in the US), selling costs when you move (agent and legal fees), maintenance (about 1% of the value a year is a common rule of thumb), property tax, insurance and HOA dues or service charges. All of them are inputs.
Does it count what my deposit could earn instead?
Yes. Both paths start with the same money: the renter invests the deposit and buying costs, and whichever path is cheaper each month invests the difference. That opportunity cost is often what makes renting win over short periods.
How does it work in the UK?
Stamp Duty, LBTT or LTT is worked out from the price, nation and first-time buyer status. For a £300,000 first home in England with a 10% deposit at 4.5% over 25 years, owning costs about £1,784 in the first month against £1,300 rent, yet with 3% house price growth buying is ahead from year 2 and by about £92,000 after 10 years. Council tax is left out because owners and renters both pay it.
What if house prices fall?
Set house price growth to 0% or below to test it. Buying with a small deposit is leveraged: a fall can wipe out equity quickly, and selling costs make short stays especially risky.
About Rent vs Buy Calculator
This rent vs buy calculator compares your net worth after each year if you buy a home or rent and invest the difference. Buying counts the deposit, purchase costs, mortgage payments, property tax, insurance, upkeep and fees, and builds equity as the home's value grows; renting counts rent rising each year and invests the money the buyer puts into the home.
It shows the year buying starts to win, the gap after the years you'd stay, first-month costs on both sides, and a year-by-year table. In the UK it adds Stamp Duty, LBTT or LTT automatically, including first-time buyer relief.
Results depend on assumptions about prices, rents and returns that nobody knows in advance, so try a few. Investment tax and the US mortgage interest deduction are left out.