Tools
Rent vs buy calculator
Enter a home price, rent, mortgage terms, and carrying costs. The calculator puts the same starting cash and monthly housing budget on both paths: renters invest the down payment, closing costs, and any monthly gap when owning costs more. Net worth at the horizon is liquid investments for rent, home equity for buy.
Arc · Published September 18, 2026 · Updated September 18, 2026
Assumptions
- Both paths use the same starting cash and the same monthly housing budget.
- Rent grows once per year. Returns and appreciation compound monthly.
- No tax deductions, seller costs, HOA, or PMI.
Net worth if you rent
$258,850
$229,874 rent paid over 7 years.
Net worth if you buy
$253,272
$425,625 all-in ownership cost over 7 years.
All-in monthly cost (year one)
Rent $2,500 · Buy $3,595
Breakeven
Renting leads at the horizon
Renting and investing the difference leads by 5,578 at 7 years under these assumptions.
What each path assumes
Both paths start with enough cash for the down payment and buyer closing costs. The renter invests that pool and adds the monthly difference whenever all-in ownership costs exceed rent. The buyer deploys the cash into equity and pays principal, interest, property tax, insurance, and maintenance.
Home appreciation and investment returns compound monthly. Rent grows once per year at the rate you enter. The model does not include tax deductions, transaction costs when you sell, HOA fees, or mortgage insurance.
Rent net worth = invested down payment + closing costs + monthly investable surplus, compounded. Buy net worth = home value − remaining loan.
Common questions
Why can breakeven be later than I expect?
Closing costs and early-year interest are front-loaded. A low appreciation rate or high maintenance share also pushes the buy path back.
Keep going
Related reading
Can I afford a bigger house?
Add the lasting housing cost to spending, then read the date again.
Related reading
Pay off the mortgage or invest?
Compare the mortgage rate with the return you are willing to assume, then account for liquidity and risk.
Tools
Mortgage payoff vs. invest calculator
Compare extra principal with investing the same monthly amount.
Tools
Compound growth calculator
Project a balance from a starting value, an annual contribution, and a real return.
Playbooks
Raise your savings rate
A general way to lift the share of income you keep, without a personality transplant.
Educational estimate only. Not tax, legal, or investment advice, and not a prediction of what your accounts will do. Methodology