Rent and Invest vs Buy Calculator
Compare renting and investing the difference vs buying a home.
See which option builds more wealth over time based on your local market.
Rent vs Buy: The Real Comparison
The classic “renting is throwing money away” argument ignores a critical fact: the money you do not tie up in a home can be invested. This calculator compares the wealth you build through each path.
The Buying Path Down payment = home price × down payment % Mortgage: 30-year fixed-rate loan on the remaining balance Monthly ownership costs: mortgage + property tax (1.2%/yr) + insurance (0.5%/yr) + maintenance (1%/yr) Net equity = home value at year n − remaining mortgage balance
The Renting Path Invest the down payment in a diversified portfolio from day one. Each month, if buying costs more than renting, invest that monthly difference too. Rent is assumed to increase 3% per year (historical average). Net wealth from renting = portfolio value at year n.
Break-Even Point The year when the buying path surpasses renting wealth is the “buy break-even.” Before that point, the renter+investor is wealthier. After it, the homeowner pulls ahead (in the assumed scenario).
Key Variables Home appreciation rate has a massive impact. National average is ~3–4%/year. Stock market historical average: ~7–10%/year (before inflation). In high-appreciation markets, buying wins earlier. In flat markets, renting may win throughout.
Important: This Is Simplified Real comparisons must also consider: closing costs (typically 2–5% when buying), tax deductions on mortgage interest, capital gains exclusion ($250k/$500k on primary residence), and rental market conditions.
How we build and check this calculator
This calculator runs entirely in your browser, so the numbers you enter stay on your device. The math behind it is written by hand and tested against worked examples and standard references before the page goes live.
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