Rent vs. Buy Calculator
Should you sign a lease or a mortgage? We break down the true cost of equity ownership versus renting and investing the difference.
About the Rent vs. Buy Calculator
This calculator uses a comprehensive total cost of ownership model. It compares the unrecoverable costs of renting (rent, insurance) against the unrecoverable costs of buying (property taxes, maintenance, mortgage interest).
The goal is to move beyond the simple "rent is throwing money away" myth and look at where your money is most efficient over a specific time horizon.
Understanding Your Results
The most important number in this calculation is the Break-Even Point. This is the year when the total cost of buying becomes less than the total cost of renting.
If you plan to move before this break-even year, renting is almost always the better financial decision because you haven't yet recouped the high transaction costs (closing fees, commissions) of purchasing a home.
The Cultural History of Buying
For much of early human history, land ownership was reserved for the nobility. The democratization of homeownership in the 20th century, particularly after WWII with the G.I. Bill, turned the "American Dream" into a reality for millions.
However, this has also led to the "financialization" of housing, where homes are viewed primarily as investment vehicles rather than shelter, making comparison tools like this essential for modern financial health.