Rent vs. Buy CalculatorFree online financial calculator — instant results, no sign-up

Mortgage Payment: M = L × [r(1 + r)^360] / [(1 + r)^360 − 1]
Net Cost of Buying: Cost_buy = Down + (M × 12 × y) + (P × 0.015 × y) − [P(1 + a)^y × 0.94 − Bal_y]
Total Cost of Renting: Cost_rent = Σ (from t=0 to y-1) [Rent × 12 × (1 + g)^t]

• PInitial home purchase price
• LInitial loan balance (purchase price minus down payment)
• rMonthly mortgage interest rate (annual rate divided by 1,200)
• MMonthly 30-year fixed mortgage payment
• yNumber of years analyzed
• aAnnual home appreciation rate (as a decimal)
• gAnnual rent growth rate (as a decimal)
• Bal_yRemaining mortgage loan balance at year y

The tool computes a 30-year fixed mortgage payment on the borrowed amount and amortizes the loan over the chosen duration. Buying expenses accumulate the down payment, all mortgage payments, and an assumed 1.5% annual maintenance fee, then credit the net proceeds of selling the appreciated home after a 6% transaction fee and remaining loan payoff. Rent expenses sum all monthly rents across the period with compounded annual rent escalation.

These are the calculator's starting values and the results it actually produces for them.

1. 1Compute the initial loan amount by subtracting the percentage down payment from the home price, then calculate the monthly payment for a 30-year fixed mortgage.
2. 2Amortize the loan balance month-by-month over the specified years to determine the total mortgage cash paid and the remaining principal balance.
3. 3Calculate the net cost of buying by adding down payment, mortgage payments, and 1.5% annual maintenance, then subtracting net sales proceeds (appreciated value minus 6% selling costs minus remaining loan balance).
4. 4Calculate the total rental cost by compounding annual rent increases year over year and compare the two totals to identify the cheaper option.

Further reading

• Consumer Financial Protection Bureau (CFPB) - Buying a House