Rent vs Buy Calculator

This calculator compares the total financial cost of renting a home against buying a comparable one over a period you choose. It accounts for closing costs, property tax, maintenance, HOA fees, PMI, the mortgage interest deduction, and the opportunity cost of your down payment. All assumptions are labelled and editable.

Property details

Property value ($)

Monthly rent for a comparable property ($)

Down payment ($)

Mortgage interest rate (% per year)

Time horizon (years)

Filing status

Single Married filing jointly

Assumptions (you can change these)

Annual property appreciation (%)

Annual investment return on down payment (%)

Annual maintenance (% of property value)

Annual property tax rate (%)National average ~1.1%. Ranges from 0.3% (Hawaii) to 2.5% (New Jersey).

Purchase closing costs (% of value)Covers title insurance, origination fee, appraisal, transfer tax, prepaid items.

Selling costs when you sell (% of sale price)Typical total: ~6% (realtor commissions + title/escrow). Adjust if using a flat-fee broker.

Ongoing costs

HOA or condo fees ($/month, enter 0 if none)

PMI rate (% of loan per year)PMI applies when down payment is less than 20%. Typically 0.5%–1.5%. Enter 0 to exclude.

Tax

Do you itemize federal deductions?

Yes — I itemize No — I take the standard deduction

Federal marginal income tax rate (%)Used to calculate the tax saving on mortgage interest deductions.

How to use this calculator

Enter the property value, monthly rent for a comparable home, down payment, mortgage rate, and time horizon.
Adjust the assumption figures if the defaults do not reflect your situation. Property tax rates vary significantly by state.
Set your HOA fees if applicable and confirm whether you itemize federal deductions.
Your results show the net financial position under each scenario after your chosen time horizon.

Understanding your results

The calculator returns a net wealth figure for each option after the period you set, assuming you sell the property at the end. Net wealth for buying is the equity you walk away with after selling costs, minus all money spent on closing costs, property tax, mortgage interest, maintenance, and HOA or PMI. The mortgage interest deduction reduces that cost if you itemize. Net wealth for renting is the value of your invested down payment minus total rent paid.

The result is most sensitive to the property appreciation rate and investment return rate. At higher appreciation, buying wins. At higher investment returns on your down payment, renting wins. Neither outcome is guaranteed. Change the assumptions to see how the answer shifts under different scenarios.

Legal and tax context

The mortgage interest deduction allows homeowners who itemize federal deductions to deduct interest paid on mortgage debt up to $750,000 (for loans originated after December 15, 2017, under the Tax Cuts and Jobs Act). Homeowners who take the standard deduction do not benefit from this. The 2024 standard deduction is $14,600 for single filers and $29,200 for married filing jointly.

The Section 121 capital gains exclusion allows homeowners who have lived in their home as a primary residence for at least 2 of the past 5 years to exclude up to $250,000 (single) or $500,000 (married filing jointly) of capital gain from federal income tax when they sell. Gains above the exclusion are subject to federal long-term capital gains tax, typically 15% for most taxpayers. State capital gains tax is not modeled and varies by state.

Property transfer taxes vary by state and county. Some states (including Texas and Florida) have no state-level real property transfer tax. Others (such as Washington DC and Pennsylvania) have rates above 1%. The default closing costs figure in this calculator is intended to cover transfer taxes along with all other purchase transaction costs.

This calculator gives a financial estimate. It does not constitute financial, tax, or legal advice. Consult a licensed advisor before making a decision of this size.