MintNumber

№ 004 · Mortgage cluster

Rent vs Buy Calculator

The honest comparison isn’t rent versus a mortgage payment — it’s the wealth each path leaves you with. This calculator pits a buyer’s home equity against a renter who invests the down payment and every dollar of monthly difference, then shows the year buying finally pulls ahead.

Net worth · break-even year

Leaning toward buying? Size up the monthly payment with the Mortgage Calculator or check your budget with the Affordability Calculator.

The home01
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Owning costs02
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Renting03
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Your plan04
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Buy break-even

Year 9

Buying wins by $10,582.46 after 10 years$2,872.62/mo to own · $2,200.00/mo to rent
BuyAhead
Net worth after stay$234,028.96
$2,872.62/mo all-in
$92,000.00 upfront
Rent + invest
Net worth after stay$223,446.50
$2,200.00/mo starting rent
$92,000.00 invested instead
Break-evenYear 9
Years you’ll stay10
Buying wins by$10,582.46
Net worth over time — renting and investing versus buying
  • Rent + invest
  • Buy
Net worth over time — renting and investing versus buying
Year 1.0Rent + invest $105,411.41, Buy $70,856.72
Year 2.0Rent + invest $118,835.51, Buy $86,291.38
Year 3.0Rent + invest $132,249.29, Buy $102,330.18
Year 4.0Rent + invest $145,627.67, Buy $119,000.68
Year 5.0Rent + invest $158,943.31, Buy $136,331.92
Year 6.0Rent + invest $172,166.48, Buy $154,354.48
Year 7.0Rent + invest $185,264.90, Buy $173,100.59
Year 8.0Rent + invest $198,203.54, Buy $192,604.18
Year 9.0Rent + invest $210,944.43, Buy $212,901.06
Year 10.0Rent + invest $223,446.50, Buy $234,028.96
Net worth · by year
Your net worth at the end of each year on each path — the home’s equity after selling costs versus the rent-and-invest portfolio — and how far ahead buying is.
YearBuy net worthRent + investBuying ahead by
1$70,856.72$105,411.41−$34,554.69
2$86,291.38$118,835.51−$32,544.13
3$102,330.18$132,249.29−$29,919.11
4$119,000.68$145,627.67−$26,626.99
5$136,331.92$158,943.31−$22,611.39
6$154,354.48$172,166.48−$17,812.00
7$173,100.59$185,264.90−$12,164.31
8$192,604.18$198,203.54−$5,599.36
9$212,901.06$210,944.43$1,956.62
10$234,028.96$223,446.50$10,582.46
How it works · methodology

The math, in the open.

buy net worth(y)  = home value·(1+a)^y · (1 − sell%) − mortgage balance(y)
rent net worth(y) = portfolio, growing at the investment return r,
                    seeded with the down payment + closing costs and fed
                    each year by (annual owning cost − annual rent)
break-even = first year buy net worth ≥ rent net worth
Both paths start with the same capital. The buyer sinks it into the home and builds equity as the loan amortizes and the price appreciates; the renter keeps it invested and adds the cash-flow difference. The break-even is where the two net-worth lines cross.
a
Annual home appreciation rate
r
Annual investment return (opportunity cost)
sell%
Cost to sell, as a % of sale price
y
Years into your stay

Assumptions & limits

  • Net worth, not monthly payment, decides it: the buyer’s equity (value less selling costs and mortgage balance) versus the renter’s invested portfolio.
  • The renter invests the buyer’s upfront capital (down payment + closing costs) and the annual difference between owning and renting cash flows.
  • Property tax, insurance, and maintenance are held constant in today’s dollars; rent and home value grow at their own rates.
  • All figures are nominal and pre-tax — income-tax deductions, capital-gains rules, and inflation are not modeled. An estimate, not tax advice.

Sources

By the MintNumber Editorial Team·Reviewed
Frequently asked

Questions about renting versus buying

How does this rent vs buy calculator decide a winner?
It compares net worth, not just monthly payments. The buyer ends each year with home equity — the property’s value, less the mortgage balance and the cost of selling. The renter invests the cash a buyer would tie up (the down payment and closing costs) plus any monthly difference, and ends with a portfolio. Whichever leaves you wealthier wins; the break-even year is when buying first pulls ahead.
Why does buying lose for the first several years?
Transaction costs. You pay closing costs to buy and roughly 6% to sell, so if you move soon you never recover them. Early mortgage payments are also mostly interest, so equity builds slowly at first. Time is what makes buying win — appreciation and principal paydown eventually outrun the renter’s invested savings.
What is the opportunity cost of the down payment?
The return that money could have earned if you had invested it instead of putting it into a house. A renter keeps the down payment and closing costs in the market, so a higher assumed investment return pushes the break-even later — sometimes past your time horizon, which flips the answer to renting.
Which assumptions move the answer the most?
How long you stay, the home’s appreciation rate, and your investment return. Small changes to any of those swing the break-even year by a lot, which is exactly why a rule of thumb like “buy if you’ll stay five years” is unreliable — run your own numbers and watch the break-even move.
What does the calculator leave out?
Income-tax effects (the mortgage-interest and property-tax deductions, and capital-gains treatment) and inflation are not modeled — every figure is in nominal dollars. Carrying costs like tax, insurance, and maintenance are held flat rather than grown. Treat the result as a clear, transparent estimate, not tax advice.