Comprehensive Guide
Learn more in our Loans & Mortgage Guide.
How it works
mortgage vs rent calculator takes your inputs and produces total cost of buying, total cost of renting, equity built, net advantage (buy vs rent). Compare the total cost of buying vs renting over time including mortgage payments, opportunity cost, equity, and tax benefits. You provide 8 inputs: Home Purchase Price (currency, in dollars) (default: 350000 dollars); Down Payment % (percent, in percent) (default: 20 percent); Mortgage Rate % (percent, in percent) (default: 7 percent); Monthly Rent (comparable) (currency, in dollars) (default: 2000 dollars); Annual Rent Increase % (percent, in percent) (default: 3 percent); Annual Property Tax (currency, in dollars) (default: 4200 dollars); Annual Home Appreciation % (percent, in percent) (default: 3 percent); Comparison Period (years) (number) (default: 10). The calculator returns 4 outputs: Total Cost of Buying (the primary result); Total Cost of Renting (a secondary output); Equity Built (a secondary output); Net Advantage (Buy vs Rent) (a secondary output). Loans and mortgages are amortized instruments where the split between interest and principal shifts every month. Understanding the total cost of borrowing — not just the monthly payment — is the difference between a sustainable debt load and one that erodes your net worth over time. This calculator reveals the full amortization picture. With the default values, total cost of buying is computed from the interaction of every input field — change any one of them and the result updates immediately, so you can stress-test different scenarios without re-entering the whole form. Adjust the inputs to match your real financial situation. The defaults are realistic starting points, but every person's circumstances differ — your actual income, expenses, rates, and timelines will produce a different answer. Use the tool iteratively: start with the defaults, then change one variable at a time to see which factor has the largest impact on your outcome.Tips
- Start with the default values to see a baseline result, then change one input at a time to understand which factor matters most for your outcome.
- Replace every default with your actual number — estimates and rules of thumb produce estimates, not answers. Pull your real figures from pay stubs, statements, or account dashboards.
- Compare the total cost of borrowing, not just the monthly payment. A lower monthly payment often means paying thousands more in interest over the life of the loan.
Frequently asked questions
Is buying always better than renting?
No. If you plan to move within 3-5 years, renting is often cheaper due to transaction costs. In high-price markets with low rent ratios, renting and investing the difference can win.
What does the mortgage vs rent calculator calculate?
It takes home purchase price, down payment %, mortgage rate %, monthly rent (comparable), annual rent increase %, annual property tax, annual home appreciation %, comparison period (years) as inputs and computes total cost of buying, total cost of renting, equity built, net advantage (buy vs rent). The primary output is total cost of buying. Compare the total cost of buying vs renting over time including mortgage payments, opportunity cost, equity, and tax benefits.
How accurate are the calculator results?
The math is exact — the same formulas a financial professional would use by hand. The precision of the output depends entirely on how realistic your inputs are. Use your actual numbers rather than estimates when possible. The defaults are reasonable starting points, but your real income, rates, and timeline will produce a different result.