Rent Vs. Buy Calculator

The age-old question of whether to rent vs. buy doesn’t have a simple answer. In reality, many factors come into the equation, such as your finances, family and job goals, market conditions and other considerations.

Think of using a rent vs. buy calculator as a warm-up exercise. The questions you’ll walk through will make you think carefully about each option. Our recommendation to rent or buy can help you think critically about questions such as:

  • What is my monthly budget?
  • Can I afford the monthly mortgage payments for a median-priced home in my area?
  • How long will I stay in my home?
  • Do I have enough money saved for a down payment and closing costs?
  • Do I want to deal with the added cost and effort of maintaining a home?
  • Are there affordable, safe housing options within a reasonable commuting distance to work?
  • Do I want to live near good schools, recreation, shopping, dining or other amenities?
  • What are the up-front costs of renting vs. buying in my area?


  • Flexibility to move around
  • Landlord is typically responsible for maintenance, repairs
  • Monthly housing expenses are stable and fixed


  • Monthly rent payments build your landlords’ equity (not yours)
  • Rents can go up over time
  • Restrictions on upgrades, decorating
  • Landlord may choose to sell the home, requiring you to move on short notice


  • Build equity and wealth over time
  • Freedom to update and customize as you wish
  • Reap certain tax advantages


  • Monthly housing payments can be higher with property taxes, homeowners insurance, HOA dues and maintenance costs factored in
  • Less flexibility to move
  • Maintenance and repairs are your sole responsibility
  • Could lose money if you sell too soon
  • Recent tax law changes limit tax benefits in some high-tax states where home prices are high

Rent vs. buy? Here’s how to decide


Having flexibility is one of the top considerations to make when you’re deciding whether to rent vs. buy. Renting allows for more mobility to change jobs and travel without being tied down by homeownership responsibilities and costs. Rental lease agreements come in shorter terms if you know you won’t be in a city for more than a few months, or you can lock in a longer term of one or two years.

If you buy a home and decide soon after to move, you could lose money on your purchase if you haven’t stayed long enough to recoup the initial costs. And, depending on market conditions, your home may not sell quickly or for as much as you paid for it. Before buying a home, ask yourself how long you plan to live there. If it’s less than a few years, renting may be the better option — both financially and logistically.

Process and costs

Renting comes with fewer up-front costs than buying a home, and approval is less cumbersome. A rental application is straightforward and may require a credit and/or background check.

If approved, expect to put down a security deposit, along with the first and last month’s rental payment in some cases. You may also have to pay a pet fee if a furry friend will live with you. You’ll also sign a lease agreement that outlines the lease length, monthly rent amount, additional fees or costs you might be responsible for, rules for renewing or terminating a lease and other guidelines. That’s it.

On the other hand, homebuyers have to undergo a more rigorous process when they apply for a mortgage. It involves substantial paperwork, and borrowers have to submit numerous documents to verify their credit, income, assets, liabilities, employment and finances. If they get any help from a friend or relative for a down payment, they have to provide a gift letter and additional documentation showing how and when the money changed hands.

Unless you have a zero-down mortgage, you’ll need anywhere from 3 percent to 20 percent for a down payment, as well as additional funds to pay closing costs. These amounts can vary depending on your loan type and purchase price.


A landlord may expect you to do small maintenance tasks while you’re a tenant, but larger (read: more expensive) repairs typically fall on the landlord. That usually means you’re off the hook if a dishwasher breaks or the heater stops working. Landlords typically hire a handyman or have a full-time maintenance professional handle these issues as they pop up.

When you own a home, though, it’s all on you. In addition to maintaining your home (think mowing the lawn, cleaning gutters, winterizing the pipes, etc.), you also foot bills for maintenance, upgrades and repairs. If you don’t have extra cushion in your budget for these items, or if you don’t want the burden of keeping up a home, renting may be the better fit. However, if you’re game for putting in some sweat equity and you have room in your budget to save for unexpected repairs, homeownership may be up your alley.


One of the key benefits homeownership has over renting is the ability to build equity as a wealth asset. Home equity is the current value of your home, less the mortgage balance you owe. You gain home equity over time by paying down your loan principal and when home values increase. You typically need to stay in your home for several years or more to gain a decent amount of equity.

When you rent vs. buy, you get a roof over your head but the payments go toward building your landlord’s equity. In affordable housing markets, it can be less expensive to buy than rent in the long term. But in costlier markets like New York City or San Francisco, many residents rent by default because home prices are simply out of reach.