Rent vs Buy Analyser

How the rent vs buy analysis works

The calculator compares total 10-year cost of buying (mortgage payments + down payment) against total 10-year cost of renting (rent payments growing at 3% annually). It then factors in home appreciation and remaining equity to determine which option builds more wealth.

Worked example with real numbers

Home price: $450,000 | Down: $90,000 (20%) | Rate: 6.8% | Monthly rent: $2,200 | Appreciation: 3.5%/yr | Horizon: 10 years

Common mistakes to avoid

• Ignoring transaction costs. Buying a home involves 3–5% closing costs ($13,500–$22,500 on a $450,000 home) and selling involves 5–6% agent fees. These costs mean you typically need to stay at least 3–5 years for buying to beat renting.
• Assuming price appreciation is guaranteed. US homes appreciated an average of 3.5% annually over the last 30 years — but some markets fell 30%+ in 2008–2012. Appreciation is an average, not a guarantee.
• Not comparing what renters do with saved capital. The $90,000 down payment invested in an index fund at 7% grows to $177,000 in 10 years. The true comparison is buying vs renting + investing the difference.
• Underestimating maintenance costs. Budget 1–2% of home value annually for maintenance ($4,500–$9,000/year on a $450,000 home). This is money renters do not pay and is often forgotten in buy vs rent comparisons.
• Using average rent without local data. Rent inflation varies enormously by city. San Francisco rents rose 2% over the same period Dallas rents rose 40%. Use your actual local data.

Related tools and reading

Use the Mortgage Calculator to work out your exact monthly payment before deciding. The Budget Planner helps test affordability under both scenarios. Read our First-Time Buyer Guide 2026 for a full cost breakdown and Mortgage Rates 2026 for current rate context. For the investment angle, run the freed capital through the Compound Interest Calculator.