Free tool
Rent vs buy calculator
Compare the monthly cost of renting and owning, what each choice leaves a client with after a chosen number of years, and the year buying breaks even. Every assumption is written on the sheet. Print or save it as a client handout. An estimate, not financial advice. Everything stays in your browser — nothing you type is sent or stored.
Like quick, simple tools? Kadapt turns listing photos into short video reels.
How the comparison is worked out
The calculator runs month by month. The buyer pays the down payment and closing costs up front, then each month the mortgage payment (principal and interest), property tax and maintenance on the home’s current value, insurance, any HOA and mortgage insurance while the loan is above 80% of the price. The home value grows at the appreciation rate. At the end of the period the home is sold: sale price minus selling costs minus the remaining loan is the buyer’s equity.
The renter pays rent that grows each year plus renter insurance. To compare fairly, the renter is assumed to invest what the buyer spends: the down payment and closing costs on day one, and any month where owning costs more than renting. When renting costs more, the renter draws the difference from the investment. The renter’s pot at the end is compared with the buyer’s equity. The break-even year is the first year the buyer’s equity is at least the renter’s pot.
Assumptions to say out loud
- Constant rates: appreciation, rent growth and investment return are the same every year.
- Taxes: mortgage interest deductions, capital gains and investment taxes are ignored.
- Costs: property tax and maintenance follow the home’s value; insurance and HOA grow at the rate you set.
- Not included: moving costs, utilities, improvements, income changes and rate changes.
Using it with clients
- Run it with the client’s real price and rent, then once with lower appreciation and a shorter stay.
- Show the break-even year: if the client expects to move before it, say so plainly.
- Print the sheet and point out that the answer is a range of outcomes, not a prediction.
Related: the mortgage payment calculator, the home affordability calculator and the rest of the free tools for real estate agents.
Check ratios and savings with the debt-to-income ratio calculator and the down payment savings calculator.
Related tools for buyers and investors: home buyer closing cost estimator and rental property cap rate calculator.
Guide: Rent vs buy: how agents can walk a client through the decision.
Common questions
Is it cheaper to rent or buy?
It depends on how long the buyer stays, how fast the home appreciates, how fast rent rises and what the money would earn elsewhere. Early on, buying usually costs more because of closing costs, selling costs and interest-heavy payments. The calculator shows the year when buying pulls ahead, if it does.
What is the break-even year?
The first year in which the buyer would be better off owning than renting, comparing what the buyer would walk away with if they sold (sale price less selling costs less the loan balance) against what the renter would have if they invested the down payment, closing costs and every monthly saving. If that never happens within 40 years on your numbers, the sheet says so.
What does the calculation include?
For owning: mortgage principal and interest, property tax, home insurance, HOA, maintenance, mortgage insurance under 20% down, closing costs and the down payment, then sale proceeds after selling costs. For renting: rent that grows each year and renter insurance. Both sides assume the same housing and nothing else changes.
What is the investment return (opportunity cost) setting?
It is what the renter could earn by investing the cash that the buyer puts into the home: the down payment and closing costs at the start, then the difference between the two monthly costs. Set it to 0 to ignore opportunity cost and compare plain cash only. It is a flat yearly rate, not a forecast.
What is not included?
Tax effects (mortgage interest deductions, capital gains, investment taxes), moving costs, utilities that differ between the two, home improvements, changes in the buyer’s income and any rate changes. The result is an estimate built from your assumptions, not a prediction.
Which numbers matter most?
Home appreciation, how long the buyer stays and the investment return move the answer the most. Try a lower appreciation figure and a shorter stay to test a downside case before showing a client.
Does the calculator save what I enter?
No. Prices, rents, names and contact details stay in your browser and are not sent to Kadapt, stored, or used in analytics. The only thing counted is that someone pressed the print, PNG or copy button, never what was on the sheet.
Is this financial advice?
No. It is an estimate based on the figures you enter and the assumptions shown on the sheet. It is not financial, tax, mortgage or legal advice. Confirm the numbers with a lender and a qualified adviser before deciding to buy or rent.