Mortgage vs Rent Calculator
Compare the monthly cost of buying a home (mortgage, taxes, insurance) versus renting.
See which option is more affordable over time.
Comparing mortgage to rent requires looking beyond the monthly payment — the true cost of homeownership includes interest, taxes, insurance, maintenance, and the opportunity cost of a down payment tied up in equity.
True Monthly Cost of Owning:
Monthly Ownership Cost = Mortgage Payment + Property Tax + Insurance + HOA + Maintenance − Tax Deduction Benefit − Equity Build Rate
True Monthly Cost of Renting:
Monthly Renting Cost = Monthly Rent + Renter’s Insurance − Investment Return on Down Payment (opportunity cost)
The Price-to-Rent Ratio:
P/R Ratio = Home Price / (Annual Rent)
- P/R < 15: Buying is likely better
- P/R 15–20: Neutral zone
- P/R > 20: Renting is likely better financially
Worked Example:
- Home price: $380,000
- 20% down ($76,000), mortgage $304,000 at 7%, 30 yr
- Monthly mortgage = $2,023
- Property tax (1.2%/yr): $380 /month
- Insurance: $120/month
- Maintenance (1%/yr): $317/month
- Total: $2,840/month
Equivalent apartment rent: $2,200/month
Down payment invested at 7%: $76,000 × 7% / 12 = $443/month opportunity cost
Adjusted renting cost: $2,200 + $443 = $2,643/month
Break-even analysis: Owning becomes cheaper after equity growth + appreciation outpace the rent savings. In appreciating markets (3–5%/yr), break-even typically occurs at 4–8 years. In flat markets it may exceed 12 years. Always include your expected tenure before buying.