Rent isn't automatically wasted money, and a mortgage isn't automatically cheaper. Compare the full cost of renting and buying the same kind of home — including what happens to your deposit, your home equity and the money you might invest along the way.
Both paths start with the same cash and the same monthly housing-and-saving budget.
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Hover, tap or focus a segment for its value.
| Buying category | First month | Renting category | First month |
|---|
Buying's line is the hypothetical position after selling at each date, including selling costs and the remaining mortgage. Renting's line is invested savings plus the expected deposit refund.
Move across the chart, or use the year slider, to inspect a point.
| Year | Buying | Renting | Difference | Home value | Mortgage left |
|---|
The down payment and principal repayments become equity; they are not counted again as lost money. Net sale proceeds can be negative when selling costs and the remaining mortgage exceed the home value.
| Item | Buying | Renting |
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These are illustrative scenarios with all other assumptions held equal. They are not likelihoods or forecasts.
Changing this control updates the whole comparison, not just the chart.
Choose the assumption to stress-test, then compare the same lower and higher alternatives.
The same starting cash is either put into the purchase or kept available to invest. The buyer's deposit becomes equity; the renter's refundable deposit is temporarily tied up.
Investment outcomes are hypothetical. Home equity is not a liquid account balance.
This is a scenario comparison, not a mortgage offer, investment recommendation or regulated financial service. No live price, rent, tax or rate data is fetched.
A rent payment disappears from your account and a mortgage payment does too. But they aren't the same kind of expense. Part of a mortgage payment reduces a loan; rent pays for somewhere to live without tying up a deposit in property.
That makes the usual comparison — rent versus the mortgage repayment — too simple. Buying can also mean insurance, maintenance, taxes, association fees and a large bill when you sell. Renting can mean annual increases, but it can also leave a home deposit free to invest.
And then there's time. A home you sell after three years lives in a different financial universe from a home you keep for twenty. Upfront costs have less time to spread out, while investments and property values have had less time to grow.
This calculator puts both paths on one timeline, with the same starting money. Change the assumptions until they look like the place you're considering — not somebody else's city, salary or property market.
The result won't tell you how much you value stability, being able to paint your walls or leaving when you want to. It will give you a clearer view of the financial price of that choice.
These are calculated examples using the page's illustrative assumptions, not global averages or predictions.
On a US$360,000 mortgage at 6% over 30 years, the monthly payment is about US$2,158.38. In month one, US$1,800 is interest and only about US$358.38 reduces the loan. That's 83.4% interest in the first payment — even though the principal share grows later.
A home worth US$450,000 today would be approximately US$521,673 after five years of hypothetical 3% annual appreciation. Selling costs of 6% would then be roughly US$31,300 — even before subtracting the mortgage balance. More home value isn't automatically more money in your pocket.
Start at US$2,200 a month and increase it 3% at each annual renewal. Year ten's rent becomes about US$2,870.50 a month. That's roughly US$670 more each month than year one, without changing the home in the example.
Investing an extra US$100 at the end of every month for ten years, at an illustrative 5% effective annual return, would become about US$15,436. You contributed US$12,000. The remainder is modelled investment growth — not guaranteed and not free of risk.
Under this page's illustrated default scenario, the renting path is ahead after five years, but the two paths are nearly tied after ten. No one switched homes or incomes. The only change was how long the scenario ran. That's why the time slider belongs next to the result, not hidden in the fine print.
Illustrative assumptions only. Recalculate or remove these fixed examples if the defaults ever change.
We model the same household in two parallel situations. In one, it buys the home and eventually sells it. In the other, it rents a comparable place and invests the money it doesn't need for the purchase or extra monthly housing costs. Both paths start with the same available cash and are given the same monthly housing-and-saving budget.
Buying starts with the price minus the down payment. The monthly mortgage payment is calculated from the loan amount, interest rate and term. Every payment is split into interest and principal: interest pays the lender, while principal reduces the balance owed.
Loan = purchase price − down payment
Monthly rate = annual mortgage APR ÷ 12
Mortgage payment = Loan × monthly rate ÷ [1 − (1 + monthly rate)−number of payments]
If the rate is zero, the payment is simply the loan divided by the number of months. If there's no mortgage, there are no mortgage payments.
Property taxes, insurance, repairs, association fees and any extra owner-only bills sit alongside the mortgage. On the renting side, we include rent, renter's insurance, and the cash that may be tied up in a refundable deposit. Purchase fees are paid at the start; selling fees are deducted when the model assumes the buyer sells.
Rent changes at the beginning of each new year, not every month. Property value compounds monthly. Property tax and percentage-based maintenance follow the modelled property value and are not inflated a second time. Insurance, association fees and owner-only utilities step up annually with the inflation assumption.
The renter can invest money that the buyer puts into the down payment and purchase. Each month, whichever side has the smaller housing bill invests the difference. We apply the same hypothetical return to invested money in both paths, so the comparison isn't secretly giving one side more money to work with.
Monthly investment return = (1 + annual assumed return)1/12 − 1
New investment balance = previous balance × (1 + monthly return) + end-of-month contribution
The buyer's final position includes investments plus the proceeds from selling the home after paying selling costs and the remaining mortgage. The renter's final position includes invested savings and the part of the rental deposit returned. The difference between those final positions is the result.
Buyer final = buyer invested balance + home sale value − selling fees − mortgage owed
Renter final = renter invested balance + returned rental deposit
Difference = buyer final − renter final
If the two ending positions are within US$1,000 or 1% of the larger position, the page calls the result a near tie. That is a presentation threshold, not a statistical confidence interval.
Imagine a US$450,000 home, a 20% down payment and a 30-year mortgage at 6%. The loan starts at US$360,000 and principal plus interest are about US$2,158 a month. Now compare it with rent of US$2,200 a month, then include ownership expenses and invest the difference rather than ignoring it.
Under the illustrative growth and cost assumptions used in the default scenario, the buying position is about US$267,208 after ten years and the renting position about US$266,576. The difference is roughly US$632 — close enough to call a tie. Alter the assumed rise in home prices or rent and the answer can change.
One more limitation matters: the model assumes both households can cover the higher of the two monthly housing costs. It is not an affordability test, and it does not model missed payments, forced sales or borrowing constraints.
These sources describe general methodology and cautions; they do not endorse this calculator or validate the sample percentages for any country. No live rates or prices are fetched.
For a shorter narrative version of the same decision, read Is It Cheaper to Rent or Buy a Home? on the CozyCalcs blog.
No. Rent buys somewhere to live without taking on a mortgage or property maintenance. Buying can build equity, but ownership also comes with interest, repairs, insurance, taxes and transaction costs. The right comparison is the total financial position of both options over the same time period.
No. The down payment is cash you put into the property and it reduces the mortgage. It becomes part of your home equity, although you may not be able to access it without borrowing or selling. The renter's alternative is to keep comparable starting cash available to invest.
Lower rent may leave more money available for investments. Buying requires an upfront down payment and transaction fees, and has ongoing ownership costs that aren't part of the principal-and-interest repayment. Over a short period, those costs can outweigh the equity built.
You still have purchase and selling costs, but fewer years in which to spread them. The mortgage balance may also remain quite high early in the loan. Try a shorter stay in the time controls to see exactly how the outcome changes under your assumptions.
It is the first point in the model where the projected ending positions for renting and buying meet or cross under the values you entered. It is not a promise that buying stays ahead after that date: the lines can cross again when growth rates or housing costs differ.
Yes. You can edit those amounts in the advanced assumptions. Property taxes and maintenance are modelled as percentages of the estimated property value by default; insurance and association fees use explicit amounts. In some places those costs are charged differently or don't exist, so change or remove any that don't fit.
Yes. Choose your currency and enter your local prices, mortgage assumptions and fees. Changing the currency changes formatting — it does not convert one currency into another. Local taxes, grants, tenancy rules, stamp duty and mortgage products are not automatically calculated.
No. Mortgage-interest deductions, home-sale taxes, grants and investment taxes depend on local law and personal circumstances. Rather than apply an inaccurate global tax rule, this calculator leaves them out and explains the limitation. Check your country's rules before treating the result as a final decision.
You can enter negative home-price growth or a negative investment return. Both are possible in reality. The calculator uses a single annual assumption for each, so it's a sensitivity test rather than a prediction of market ups and downs.
Not necessarily. The monthly cost affects how much either side can invest, but buying also creates home equity, while renting can preserve starting capital. The result depends on time, transaction costs, property values and investment outcomes — not only the first month's payment.
The calculator uses a simplified fixed-rate, monthly repayment formula. A bank may calculate interest daily, vary payment timing, include fees or apply mortgage-insurance rules. Use your lender's actual quote as the input and rely on the lender's contract for real repayments.
Not in full. The money is temporarily unavailable, but the model returns the entered refundable portion at the end. Any non-refundable part is an expense. Because the deposit is tied up, it can't be invested during the time you're renting.
More reading: Is It Cheaper to Rent or Buy a Home? explores the monthly-payment trap and moving-day costs in a shorter narrative.
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