Compare the true net cost of renting versus buying over your planned stay, including equity, appreciation and closing costs.
| Input | Result |
|---|---|
| $350k home, 20% down, 6.5%, $1,800 rent, 7 yrs | Buying ≈ $63k ahead |
| Same but 3-year stay | Renting ≈ $12k ahead (closing costs dominate) |
| Same but $2,600 rent | Buying ≈ $127k ahead |
Closing and selling costs are roughly 9% of the price, paid once. Over 7+ years the equity and appreciation outweigh them; over 2–3 years they usually do not. Short stays favor renting almost regardless of prices.
Tax deductions, insurance, HOA fees, opportunity cost of investing the down payment, and the risk that home prices fall. It is a structured first pass, big decisions deserve a fuller spreadsheet with your real numbers.
No, rent buys flexibility and avoids interest, taxes, maintenance and transaction costs, which are also unrecoverable. In the early years of a mortgage, most of each payment is interest, which is 'thrown away' in the same sense.
How this page is built and kept current. Written and fact-checked by the MoneyCalcsHub editorial team. We do not sell financial products and we accept no payment to change a result, the arithmetic on this page runs in your own browser from the numbers you type.
Official sources used on this page:
Source-dependent figures are reviewed when the cited issuer publishes an update. Worked examples show the formula applied to the listed inputs; interactive results are calculated in your browser.
Spotted an error? Write to [email protected], corrections are published on the page and the last-updated date changes with them. Full process: editorial policy.