ToolnozaFINANCE TOOL
Rent vs Buy Calculator
Compare renting and buying a home over time, including mortgage, fees, upkeep and investing the savings.
Rent vs Buy Calculator
FREE ONLINE TOOLSTEP BY STEP
How to use rent vs buy calculator
- Review the ending wealth and annual comparison.
- Adjust assumptions using local costs and your circumstances.
IN PRACTICE
Example
With a 120,000 home, 100% down, no fees, costs or growth, and rent of 1,000/month, buying ends year 1 with 132,000 if it invests the monthly savings; renting ends with 120,000.
GOOD TO KNOW
How does this comparison work?
Illustrative financial model, not a forecast or personal advice. Fixed-rate, fully amortizing monthly mortgage. No tax deductions, capital-gains tax, subsidies, moving costs or refundable deposits. Enter local fees and taxes yourself; no country-specific rules are applied. Investment returns should be net of your expected investment taxes and fees. All values are nominal, not inflation-adjusted.
How the comparison works
Both scenarios start with the same capital. Buying spends the down payment and purchase fees; renting invests that amount. Each month both use the same housing budget: the cheaper option invests the difference at the entered return. Contributions are made at month-end. At each year-end, buyer wealth equals home sale proceeds minus selling fees and remaining debt, plus buyer investments. Renter wealth is its investment balance.
Mortgage payment: P × r ÷ (1 − (1 + r)^(−n)), where P is the loan, r the monthly interest rate and n the number of payments. At zero interest: P ÷ n.
Investment returns and rent/value/cost growth use equivalent monthly compounding of annual rates. Mortgage interest uses the nominal annual rate divided by 12. Property tax and maintenance follow the modeled home value; insurance and extras follow cost growth. Other owner costs can include association fees, mortgage insurance and the utilities difference. Other renter costs can include tenant insurance. Fixed extra costs continue for the full period; adjust or set them to zero if temporary.
Illustrative financial model, not a forecast or personal advice. Fixed-rate, fully amortizing monthly mortgage. No tax deductions, capital-gains tax, subsidies, moving costs or refundable deposits. Enter local fees and taxes yourself; no country-specific rules are applied. Investment returns should be net of your expected investment taxes and fees. All values are nominal, not inflation-adjusted.