Rent vs Buy Calculator: Compare Total Costs and Net Worth Over Time
The rent vs buy question is rarely answered by “monthly payment” alone.
Buying can build wealth through equity and appreciation, but it also comes with ongoing costs (property taxes, insurance, HOA fees, maintenance) and a large upfront cash requirement (down payment and closing costs).
Renting can be financially strong when:
- Rent is meaningfully cheaper than owning
- You invest the difference consistently
- You don’t stay long enough to benefit from equity build-up
A good comparison should show both total cash out and net worth outcomes under the same time horizon.
What a Rent vs Buy Calculator should include
Buying inputs (homeownership)
- Home purchase price and down payment
- Mortgage APR and term (15/20/30 years)
- Property tax rate
- Home insurance
- HOA fees
- Maintenance (often modeled as a % of home value)
- Closing costs
- Home appreciation rate
- Years you plan to stay
Renting inputs
- Monthly rent and annual rent increases
- Renter’s insurance
- Investment return rate (if renting and investing the difference)
How Tooladex compares renting vs buying
The Tooladex calculator models both paths over your chosen “years planning to stay.”
Buying: net worth and net cost
Buying produces:
- Ending home equity: home value minus remaining mortgage balance
- Total cash paid: down payment + closing costs + mortgage payments + taxes + insurance + HOA + maintenance
- Net cost: total cash paid minus ending equity
This is why buying can look expensive month-to-month but still produce strong net worth outcomes over long horizons.
Renting: net worth and total rent paid
Renting produces:
- Total rent paid over the period (with annual increases)
- Total renter’s insurance
- Investment portfolio growth (the model assumes you invest upfront cash you didn’t spend on down payment and closing costs, and then invest the monthly difference between buying and renting)
At the end, your “rent net worth” is the investment portfolio value.
Break-even: there are two useful ways to define it
The calculator shows two break-even timelines:
Net worth break-even (buy ≥ rent)
This answers: “At what year does home equity exceed the renter’s investment portfolio?”
Total cost break-even (buy net cost ≤ rent paid)
This answers: “At what year is the buyer’s net cost lower than total rent paid?”
These can differ, especially when appreciation and investment returns are close.
Why your “years planning to stay” matters most
In many markets, buying becomes more favorable as your stay length increases because:
- More of each mortgage payment goes to principal over time
- Appreciation compounds on a larger base
- Closing costs are amortized over more years
If you expect to move in 2–3 years, renting often wins unless buying is unusually cheap or appreciation is unusually strong.
Use the Rent vs Buy Calculator
Rent vs Buy Calculator
Compare renting vs buying a home over your planned stay. Includes mortgage costs, taxes, HOA, maintenance, appreciation, rent inflation, and investing the difference.
To get a useful answer, try these three runs:
- Your best estimate (baseline)
- A “higher returns” scenario (increase investment return rate)
- A “higher appreciation” scenario (increase home appreciation rate)
If your conclusion changes easily, the right move is usually to reduce risk: save more, buy less house, or delay the decision until you can lock in better terms.
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