Rent vs. Buy Calculator

The rent-or-buy decision is the single largest financial choice most people make. This calculator compares total wealth outcomes — not just monthly payments — by modeling what happens to your money over time in both scenarios.

How it works: The buyer path models your mortgage payments, property taxes, insurance, maintenance, and equity buildup. The renter path assumes you invest the down payment plus any monthly savings (the difference between buying and renting costs) into the stock market. The breakeven year is when the buyer's net worth (home equity minus selling costs) surpasses the renter's investment portfolio. Toggle VA Loan at the top of the inputs panel to model 0% down + no PMI + the VA funding fee (waived at 10%+ disability).
Veterans: the model now supports the VA loan path, and the state pages' Paycheck Reality slider includes a Veteran toggle that surfaces tax-free disability income (W-2 equivalent), VA healthcare savings, and (at 100% P&T) state property-tax exemptions, vehicle-registration waivers, and CHAMPVA value for dependents. The W-2 Trap walks through the full active-duty / retiree / disability-rated financial-independence math.

Inputs

Tax Benefits

Stay Probability

Maintenance Model

Even 1% of home value drawn down each year.

Renting wins
for the full 10-year period
Buyer Net Worth at Year 10
$257,822
Home: $591,875 | Equity: $293,335 | Sell costs: $35,513
Renter Portfolio at Year 10
$416,213
Down payment + savings invested at 7% return
Monthly Cost Comparison (Year 1)
Buy: $3,155/mo | Rent: $1,800/mo | Diff: $1,355/mo
Monthly Cost Comparison (Year 10)
Buy: $3,401/mo | Rent: $2,349/mo | Diff: $1,052/mo
Net Wealth Difference at Year 10:
Renting wins by $158,391
Cumulative Tax Benefit (Itemized vs Standard)
$0
Year 10 itemized deduction ($26,492) vs standard ($30,000). Marginal rate 22%, SALT capped at $10,000.
Stay-Adjusted Buyer Net Worth at Year 10
$245,392
65% chance you stay through year 10; remaining probability assumes you sell early and pay $35,513 in transaction costs again. Stay-adjusted gap vs renter: $-170,821.
Opportunity Cost (Down Payment Path)
$416,213
What the renter's portfolio is worth at year 10 — the down payment + closing + monthly savings invested at 7%. Comparing this to buyer net worth ($257,822) is the only honest opportunity-cost view. Renting only "wins" if you actually invest the difference.
Maintenance Model: Smoothed
$50,487
Total maintenance over 10 years. Smoothed mode = 1% of home value each year. The lumpy mode usually shows higher peak years and lower troughs — toggle to compare.

Run the same comparison against actual S&P 500 + QQQM history

The calculator above uses a flat assumed investment return. The backtest below replays your inputs across every rolling 10/15/20-year window of actual calendar-year returns for the S&P 500 (1957–present) or QQQM/Nasdaq-100 (1985–present) and shows the worst, median, and best historical outcomes — so you can see how much variance your starting year would have introduced. Toggle on after-tax mode to apply MID, SALT cap, LTCG, and the Sec 121 capital-gains exclusion.

Rent + invest vs. buy + own — backtested

15-yr rolling history · S&P 500
Upfront capital committed (both paths): $101K = 20% down + 3% closing on a $440K home
BUY + OWN
Median ending wealth $387K $236K real
Net gain on $101K upfront: $285K
Range: $387K → $387K
Wealth = home value (appreciated at 3%/yr) − remaining mortgage − 6% selling cost. Gain = wealth − upfront. Leveraged appreciation on full $440K asset comes from the 20% down.
RENT + INVEST
Median ending portfolio $894K $633K real
Net gain on $305K contributed: $589K
Range: $416K → $2.36M
Same upfront cash + each year's (own − rent) surplus invested in S&P 500 at actual annual returns. Median renter contributed $305K total.
Median wealth delta: $507K in favor of RENT + INVEST
What if you'd started in a recent year? (most-recent 15yr window: 2011–2025)
WindowBuy wealthBuy gainRent wealthRent gainWealth delta
2011–2025$387K$285K$1.33M$1.02M$943K rent
2010–2024$387K$285K$1.36M$1.05M$971K rent
2009–2023$387K$285K$1.31M$1.00M$919K rent
2008–2022$387K$285K$894K$589K$507K rent
2007–2021$387K$285K$1.16M$852K$770K rent
2006–2020$387K$285K$991K$686K$604K rent
2005–2019$387K$285K$888K$584K$502K rent
2004–2018$387K$285K$733K$428K$346K rent

Educational tool, not investment or real-estate advice. Past performance does not guarantee future results. Backtests use actual annual total returns including dividends from S&P 500 (Damodaran (NYU Stern) annual total return (with dividends), 1957-present.).

Buyer model: 30-yr fixed mortgage, P&I + property tax + insurance + maintenance (1% of value/yr) + HOA. Selling cost = 6%. Investor model: down payment + annual cashflow surplus invested in the chosen index at that calendar year's actual return.

Tax model: pre-tax comparison. Toggle "after-tax mode" to apply MID, SALT, LTCG, and the Sec 121 capital-gains exclusion.

This calculator does not adjust for: PMI (assumed 20%+ down), differential transaction costs by state, lifestyle factors (commute, schools, kids), illiquidity / forced-sale risk, or insurance availability constraints (e.g., FL/CA wildfire). Consult a fiduciary advisor and tax professional before acting on any of this.

Assumptions & Notes

  • Mortgage: 30-year fixed with standard amortization
  • PMI: 0.5% annually when down payment is below 20%, removed at 80% LTV (conventional only — VA loans never require PMI)
  • VA loan: 0% down allowed; VA funding fee (2.15% first use / 3.30% subsequent at 0% down) is financed into the loan; waived for 10%+ service-connected disability. Source: VA.gov funding fee.
  • Buyer net worth includes home equity minus estimated selling costs (commissions, closing)
  • Renter invests the down payment, closing costs, and any monthly savings at the specified return rate
  • Tax benefits of homeownership: itemize toggle compares cumulative SALT ($10k cap) + mortgage interest deduction ($750k principal cap) vs the 2025 standard deduction ($15k single / $30k MFJ); marginal rate slider lets you set your federal bracket
  • Stay probability: the deterministic outcome assumes you stay through year H; the stay-probability slider produces an EV-weighted figure that pays sell costs again if you exit early
  • Maintenance: smoothed (% of value/yr) or lumpy (paint Y8, HVAC Y13, roof Y18, second HVAC Y22 + small annual baseline)
  • Default values are pre-filled with current U.S. market data from HomeStats
Default rates and prices from FRED and Redfin. Calculator is for educational purposes only.