SmartCost Lab

Rent vs Buy Calculator

Compare buying a home with renting a similar one and investing the difference. The calculator tracks both paths month by month and shows which leaves you with more wealth after the number of years you expect to stay.

Last reviewed 16 October 2026 · How we build and check calculators

Buying

$

Example value.

%
%

Required — use a quote or your lender's current rate. We don't pre-fill rates.

years
% of price

Required. Closing costs, legal fees, inspections, plus stamp duty / land transfer tax where it applies — these vary by state, province and price, so check your local calculator.

Owning

$

Required — use the amount for this property or area. Assumed to rise in line with the home's value (UK council tax is banded, so set price growth accordingly or treat this as approximate).

$
% of value / yr

Required. Older homes generally need more; pick a figure you're comfortable budgeting.

$
%

Blank = 0%. This is your assumption, not a forecast.

% of sale price

Required. Agent/realtor commission, legal fees and other selling costs.

Renting

$

Example value.

%

Blank = 0%.

$

Investing the difference

% / yr

Whoever has lower monthly costs invests the difference; the renter also invests the deposit and buying costs. Blank = 0% (cash).

Results will appear here

Fill in the highlighted fields. Anything marked as required has no verified default, so we need your own figure.

Why the answer isn't just “rent is dead money”

Mortgage interest, property tax, insurance, maintenance and the costs of buying and selling are also money you don't get back. Meanwhile the deposit you'd tie up in a home could earn a return elsewhere. A fair comparison has to count all of these, which is what this calculator does: it compares net worth on each path, not monthly payments.

How the model works

mortgage payment = L × i ÷ (1 − (1 + i)^−n) (L = loan, i = monthly rate, n = months) owning cost (month) = mortgage + value × (property tax % + maintenance %) ÷ 12 + insurance ÷ 12 + fees renting cost (month) = rent (rising yearly) + renters insurance ÷ 12 whoever pays less that month invests the difference at your chosen return buyer net worth = value × (1 − selling cost %) − loan balance + buyer's investments renter net worth = deposit + buying costs invested on day one + renter's investments

The renter starts by investing the cash the buyer would have spent on the deposit and buying costs. Every month, whichever household has the lower housing cost invests the difference, so both paths spend exactly the same amount — the comparison is purely about where the money ends up. The break-even year is the first year in which selling the home would leave the buyer at least as well off as the renter.

We checked the engine against cases worked by hand. For example, with every rate and cost set to zero, a $100,000 home bought with $20,000 down and rent of $1,000 a month gives the buyer $140,000 and the renter $20,000 after ten years — exactly what you'd expect when the buyer's monthly payment is $666.67 and the remaining $333.33 a month is invested.

Why so many fields are required

Mortgage rates, property taxes and transfer taxes vary by lender, location and price band, and they change. Rather than slip in a number that could be wrong for you, we ask for each one. Some good places to look: your lender's quote for the mortgage rate; your city, county or council for property tax; and your government's stamp duty or land transfer tax calculator for buying costs. Growth and return fields default to 0% when left blank — try a few different values to see how sensitive the result is.

What this calculator leaves out

  • Income tax effects such as the US mortgage interest deduction, and capital gains tax on investments or (in some cases) on the home.
  • Mortgage insurance (PMI in the US, CMHC insurance in Canada, LMI in Australia), which may apply with small deposits — add it to the monthly fees field if it applies to you.
  • Remortgaging at a different rate, which is common in the UK, Canada and Australia where fixed periods are shorter than the full term.
  • The non-financial side: stability and control of owning versus flexibility of renting.

Sources

Results are estimates based on the figures you enter and the stated assumptions. They are not financial, tax, legal or engineering advice. Spotted a problem? Tell us.