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Rent vs Buy CalculatorNet Cost Over Your Holding Period

What do these figures come to once the work is shown?

Net cost of owning after equity and sale costs against the cost of renting, with the opportunity cost of the down payment.

  • Runs in your browser
  • Nothing stored or sent
  • Free, no sign-up
Your figures
Example figuresIllustrative only. Type over them with your own.
Advantage of buying (positive means buying costs less)
$15,957
Over your holding period, before income tax
Net cost of owning
$186,332
Net cost of renting
$202,289
Drawn to one scale
Net cost of owning$186,332
Net cost of renting$202,289
Advantage of buying (positive means buying costs less)$15,957
Monthly mortgage payment (P&I)$2,023
Net sale proceeds after loan payoff$173,101
Opportunity cost of the down payment$32,568
All results
MeasureResult
Net cost of owning$186,332
Net cost of renting$202,289
Advantage of buying (positive means buying costs less)$15,957
Monthly mortgage payment (P&I)$2,023
Net sale proceeds after loan payoff$173,101
Opportunity cost of the down payment$32,568
Home value at sale$491,950
How this was worked out
Work shownrecomputed as you type
Owning = down payment + payments + tax, upkeep and insurance - (sale price x (1 - selling cost) - loan balance) + down payment opportunity cost
Renting = sum of rent with yearly increases
Advantage = renting - owning

Illustrative arithmetic on the figures you enter. Check the result against your firm's methodology before relying on it.

The formulas

  • Owning = down payment + payments + tax, upkeep and insurance - (sale price x (1 - selling cost) - loan balance) + down payment opportunity cost
  • Renting = sum of rent with yearly increases
  • Advantage = renting - owning

How it works

Owning has a cash cost every year and a payoff at sale. This tool adds the down payment, the mortgage payments, property tax, maintenance and insurance, then subtracts what you keep when you sell after selling costs and paying off the loan. It also charges the return your down payment could have earned elsewhere.

Renting costs the rent you pay as it rises. The result depends mostly on how long you stay and how fast prices rise. It leaves out income tax effects, closing costs on the purchase, and the return on monthly cash that renting leaves free. Run several holding periods before deciding.

Illustrative figures only. Check the result against your firm's methodology before relying on it.

Common questions

Why does a short stay favor renting?

Selling costs and the early years of mostly-interest payments take time to recover.

Does the tool include mortgage interest deduction?

No. Taxes are left out.

What property tax rate do I use?

Use the effective rate from your local tax bill.

Formulas on this page are the standard definitions.

Runs in your browser. The figures you type are not sent to CORAA or stored. Check the result against your firm's methodology before relying on it.

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