How to use
- Replace the example inputs with your loan and property figures.
- Select Calculate to update the estimate and any schedule.
- Change one assumption at a time, then compare the result with the earlier scenario.
How this calculation works
The renter starts by investing the cash that the buyer uses for a down payment and purchase costs. Each month, whichever option costs less invests the difference. The buyer’s end value includes sale proceeds after selling costs and remaining debt, plus any invested monthly surplus.
Buying wealth = net sale equity + invested owner surplus; renting wealth = invested upfront cash + invested renter surplus
Worked example
Illustrative inputs — not a quote or a local average.
- Home price
- $400,000.00
- Cash down payment
- $80,000.00
- Interest rate
- 6.5 %
- Loan term
- 30 years
- Annual property tax
- $4,200.00
- Annual home insurance
- $1,800.00
- Monthly HOA dues
- $0.00
- Monthly mortgage insurance
- $0.00
- Monthly rent
- $2,200.00
- Transaction costs
- $4,500.00
- Comparison period
- 7 years
- Annual home appreciation
- 3 %
- Annual investment return
- 4 %
- Annual rent growth
- 3 %
- Annual owner cost growth
- 3 %
- Annual maintenance budget
- 1 %
- Selling costs
- 6 %
Buying: net equity + invested surplus: $173,100.59. Renting: investment balance: $160,733.12. Buying minus renting wealth: $12,367.47.
Reading the result
The wealth difference can move sharply when appreciation, rent growth or holding time changes. Test several plausible scenarios rather than reading one result as a forecast. Owner cash paid and rent paid are shown separately, but cash outflow alone does not measure the equity or investments left at the end.
Before acting on the estimate
The model holds the mortgage rate fixed and grows entered owner costs at one rate. It omits tax deductions, taxes on gains, refundable rent deposits, major irregular repairs and transaction-specific restrictions. Investment returns can be negative. Neither appreciation nor a market return is guaranteed.
Questions, answered
Does it assume rent is wasted?
No. It values housing use through cash flows and tracks the renter’s investments explicitly.
Can renting finish ahead?
Yes. The answer depends on the price, rent, transaction costs, returns and holding period.