Useful next calculations
When to use this calculator
- Before buying, renting, refinancing or reviewing a property investment.
- When you want to compare cash flow, tax, yield or ownership costs.
- When you need a fast estimate before speaking to an agent, lender or adviser.
- When you want to see how a rate or price change moves the result.
A worked example
These are the example figures the calculator opens with.
| Input | Value |
|---|---|
| Home Price ($) | $400,000 |
| Down Payment ($) | $80,000 |
| Mortgage Rate (%) | 7% |
| Monthly Rent ($) | $2,500 |
For those figures the calculator returns:
- Buy advantage vs renting: $183,456.00
- Total rent paid: $300,000.00
- Projected equity: $505,312.56
- Monthly mortgage: $3,715.47
Method & assumptions
This rent vs buy calculator evaluates the financial outcome of purchasing a home versus continuing to rent over a user-defined time horizon. The buy scenario totals all out-of-pocket costs — down payment, closing costs (estimated at 3%), monthly mortgage payments, annual property tax (1.1%), and annual maintenance (1%) — then subtracts the net equity realised at sale (future home value minus remaining mortgage balance minus selling costs of 6%). The rent scenario totals all rent paid over the same period. The difference represents the financial advantage or disadvantage of buying. A positive 'buy advantage' means that over the chosen period, buying costs less in total than renting. Assumptions such as 3% annual appreciation and fixed maintenance costs are simplified estimates; market conditions in your specific location may differ substantially.
Common mistakes
- Using an assumption that is not supported by a current local quote, bill, statement or official source.
- Treating a generic estimate as a lender, provider, payroll or tax authority decision.
- Mixing monthly and annual inputs without converting them consistently.
- Testing only one scenario instead of checking how a cautious assumption changes the result.
What to do next
- Run a second scenario with a cautious assumption so you can see the downside clearly.
- Compare the result with the related calculators below before making a decision.
- Check current local rules, eligibility and provider terms before applying or committing money.
- Keep a record of the assumptions so you can update the estimate when a quote, bill or pay figure changes.