Financial Calculator

Rent vs Buy

Compare the net worth impact of renting versus buying a home over time. Make informed housing decisions based on your financial situation.

Inputs
Adjust the values below to model your specific situation.
$2,500
$

What you would pay in rent for a comparable home.

$500,000
$

The purchase price of the home you are considering.

$100,000
$

Cash you have upfront. (Renter invests this; Buyer puts it into equity).

6.5%
%

Annual interest rate on the loan.

10 Years
Years

How long do you plan to live in this home?

Net Worth Projection
Comparing the net worth of renting and investing vs. buying a home over time.

Analysis: Buying wins after 5 years.

How is this calculated?

This calculator uses a Net Worth Comparison based on a 'Constant Budget' assumption. This creates a fair comparison by ensuring both scenarios spend the exact same amount monthly.

The Buyer

Pays mortgage, taxes, insurance, and maintenance. They build wealth through home equity (the value of the home minus the remaining loan).

The Renter

Has the same monthly outflow as the buyer. If renting is cheaper, they invest the difference (typically in a stock market index fund returning ~7%).

The chart compares the final net worth of both individuals over time. It answers the question: "Who ends up wealthier?" rather than just "Who spent less money?"