Rent vs. Buy Calculator
Evaluate the complete opportunity cost of homeownership versus renting. Models down payment market reinvestment, home appreciation, property tax inflation, and exact breakeven timelines.
Home Purchase Assumptions
Renting & Investment Assumptions
Wealth Comparison at Year 10
Net equity vs. compounding market portfolio
Cumulative Wealth Progression (Years 1 to 15)
| Year | Home Value | Remaining Debt | Buyer Net Equity | Renter Portfolio | Advantage |
|---|---|---|---|---|---|
| Year 1 | $465,750 | $355,976.19 | $81,828.81 | $105,965.34 | +$24,136.53 Rent |
| Year 2 | $482,051.25 | $351,682.89 | $101,445.28 | $122,530.75 | +$21,085.47 Rent |
| Year 3 | $498,923.04 | $347,102.07 | $121,885.59 | $139,724.45 | +$17,838.86 Rent |
| Year 4 | $516,385.35 | $342,214.46 | $143,187.77 | $157,576.27 | +$14,388.5 Rent |
| Year 5 | $534,458.84 | $336,999.52 | $165,391.79 | $176,117.77 | +$10,725.98 Rent |
| Year 6 | $553,164.9 | $331,435.32 | $188,539.68 | $195,382.35 | +$6,842.67 Rent |
| Year 7 | $572,525.67 | $325,498.48 | $212,675.65 | $215,405.38 | +$2,729.73 Rent |
| Year 8 | $592,564.07 | $319,164.04 | $237,846.18 | $236,224.29 | +$1,621.89 Buy |
| Year 9 | $613,303.81 | $312,405.37 | $264,100.21 | $257,878.76 | +$6,221.45 Buy |
| Year 10 | $634,769.44 | $305,194.05 | $291,489.22 | $280,410.83 | +$11,078.39 Buy |
| Year 11 | $656,986.37 | $297,499.79 | $320,067.4 | $303,865.06 | +$16,202.34 Buy |
| Year 12 | $679,980.9 | $289,290.22 | $349,891.82 | $328,288.72 | +$21,603.1 Buy |
| Year 13 | $703,780.23 | $280,530.84 | $381,022.57 | $353,731.94 | +$27,290.63 Buy |
| Year 14 | $728,412.54 | $271,184.84 | $413,522.95 | $380,247.9 | +$33,275.04 Buy |
| Year 15 | $753,906.97 | $261,212.91 | $447,459.65 | $407,893.09 | +$39,566.56 Buy |
Rent vs. Buy Mathematical Methodology
Buyer Net Wealth Formula
Selling fees (typically 5% to 6% for real estate commissions and transfer taxes) represent a major hurdle during the initial 3 to 5 years of homeownership.
Renter Opportunity Cost Model
By investing the upfront down payment and initial closing costs in index funds yielding 7% to 10%, renters build liquid equity that frequently outperforms short-term housing appreciation.
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