Rent vs Buy Calculator
Rent vs Buy is evaluated from Home Purchase Price, Down Payment and Mortgage Interest Rate. The calculation reports Monthly Cost of Buying, Break-Even Year and Net Worth Difference.
Results
About the Rent vs Buy Calculator
The calculator uses a custom php logic configuration. Each reported value is read as a direct evaluation of the stored rules with the declared field formats and units.
Formula basis:
Monthly Buy Cost = Mortgage P&I + Property Tax/12 + Insurance/12 + Maintenance/12 + PMI
Monthly Rent Cost = Current Rent x (1 + annual_increase/100)^year
Break-Even occurs when:
Cumulative Buy Costs - Net Equity Gained = Cumulative Rent Costs
Net Equity = Home Value (appreciated) - Remaining Mortgage Balance - Selling Costs (6%)
Interpret the outputs in the order shown by the result fields. Optional inputs affect only the outputs that depend on those variables.
Formula & How It Works
The calculation applies the following relations exactly as recorded in the metadata: Monthly Buy Cost = Mortgage P&I + Property Tax/12 + Insurance/12 + Maintenance/12 + PMI Monthly Rent Cost = Current Rent x (1 + annual_increase/100)^year Break-Even occurs when: Cumulative Buy Costs - Net Equity Gained = Cumulative Rent Costs Net Equity = Home Value (appreciated) - Remaining Mortgage Balance - Selling Costs (6%) Each output field is produced by substituting the supplied inputs into the relevant relation and then applying the declared rounding or text format.
Worked Examples
Example 1: Suburban Market — Buying Wins at Year 5
Inputs
With Home Purchase Price = 380,000, Down Payment = 76,000, Mortgage Interest Rate = 6.75 and Loan Term = 30 as the stated inputs, the result is Monthly Cost of Buying = $5,466.11, Break-Even Year = 3.7 years and Net Worth Difference = $35,091. Each value corresponds to the declared output fields.
Example 2: High-Cost City — Renting Wins Short-Term
Inputs
With Home Purchase Price = 900,000, Down Payment = 180,000, Mortgage Interest Rate = 7 and Loan Term = 30 as the stated inputs, the result is Monthly Cost of Buying = $14,575 and Net Worth Difference = $82,005. Each value corresponds to the declared output fields.
Example 3: Affordable Market — Immediate Advantage
Inputs
With Home Purchase Price = 220,000, Down Payment = 44,000, Mortgage Interest Rate = 6.5 and Loan Term = 30 as the stated inputs, the result is Monthly Cost of Buying = $2,557.22, Break-Even Year = 2 years and Net Worth Difference = $20,316. Each value corresponds to the declared output fields.
Example 4: Long-Stay Buyer — 10-Year Horizon
Inputs
With Home Purchase Price = 520,000, Down Payment = 104,000, Mortgage Interest Rate = 6.75 and Loan Term = 30 as the stated inputs, the result is Monthly Cost of Buying = $7,953.89, Break-Even Year = 4.5 years and Net Worth Difference = $48,019. Each value corresponds to the declared output fields.
Common Use Cases
- Decide whether renting or buying makes more financial sense in your market
- Calculate the break-even point where buying becomes cheaper than renting
- Compare total housing costs over a 5, 10, or 20-year horizon