Should you rent or buy a home? Compare the total lifetime cost of renting vs buying, factoring in opportunity cost, equity built, appreciation, and tax benefits.
Your Situation
🏠 Buying Scenario
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%
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% of home value
🏢 Renting Scenario
$
%
%
years
Better Option
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Net Advantage
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Total Buy Cost
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Total Rent Cost
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Home Value (end)
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Equity Built
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Down Payment
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Monthly Mortgage
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Total Mortgage Payments
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Maintenance / Tax / Insurance
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Total Buy Cost (cash out)
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Future Home Value
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Net Buy Cost (after equity)
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Total Rent Paid
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Investment Returns (down payment)
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Net Rent Cost (after opportunity)
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FAQ
What factors favor buying over renting?
Buying is better when: you plan to stay long-term (5+ years), local home appreciation is strong, your income is stable, mortgage payments are near or below local rent, and you value stability and equity building.
What factors favor renting?
Renting wins when: you may need to relocate, home prices are very high relative to rent (high price-to-rent ratio), investment returns exceed home appreciation, and you want flexibility.
What is the price-to-rent ratio?
Price-to-Rent = Home Price ÷ Annual Rent. Under 15 = buying favored; 15-20 = neutral; Above 20 = renting often better financially. Major cities often have ratios of 25-40+, favoring renting.
How does opportunity cost affect this calculation?
When you buy, you commit your down payment to the home. If invested in the stock market instead, it could earn 6-10% annually. This "opportunity cost" is a real financial factor that rent-vs-buy calculators must account for.