Compare the long-run net worth of buying a home with renting and investing the difference, and see when buying breaks even.
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With home price 400,000, deposit (%) 20, mortgage interest rate (%) 6, mortgage term (years) 30, home price growth per year (%) 3, ownership costs per year (% of value) 1.5, buying costs (% of price) 3, selling costs (% of price) 6, monthly rent 2,000, rent increase per year (%) 3, investment return (%) 5, years to compare 10, the buying comes out ahead by is $50,680.45.
| Home price | 400,000 |
|---|---|
| Deposit (%) | 20 |
| Mortgage interest rate (%) | 6 |
| Mortgage term (years) | 30 |
| Home price growth per year (%) | 3 |
| Ownership costs per year (% of value) | 1.5 |
| Buying costs (% of price) | 3 |
| Selling costs (% of price) | 6 |
| Monthly rent | 2,000 |
| Rent increase per year (%) | 3 |
| Investment return (%) | 5 |
| Years to compare | 10 |
| Buying comes out ahead by | $50,680.45 |
|---|---|
| Net worth if you buy | $237,883.61 |
| Net worth if you rent | $187,203.16 |
| Monthly cost of buying in year 1 | $2,418.56 |
| Monthly rent in year 1 | $2,000.00 |
| First year buying comes out ahead | 6 years |
Amounts are shown in US dollars for illustration. Choose your own currency in the calculator above; it labels amounts and does not convert them.
The model runs month by month. The buyer pays the mortgage and ownership costs, the renter pays rent that grows each year, and whoever has the lower monthly cost invests the difference at the return you enter. The renter also invests the deposit and buying costs. Change one assumption at a time to see what really decides the answer.
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Buy net worth = home value − loan balance − selling costs + invested savings; rent net worth = invested deposit and savings. The model runs month by month. The buyer pays the mortgage and ownership costs, the renter pays rent that grows each year, and whoever has the lower monthly cost invests the difference at the return you enter. The renter also invests the deposit and buying costs. Change one assumption at a time to see what really decides the answer.
With home price 400,000, deposit (%) 20, mortgage interest rate (%) 6, mortgage term (years) 30, home price growth per year (%) 3, ownership costs per year (% of value) 1.5, buying costs (% of price) 3, selling costs (% of price) 6, monthly rent 2,000, rent increase per year (%) 3, investment return (%) 5, years to compare 10, the buying comes out ahead by is $50,680.45. Net worth if you buy: $237,883.61; Net worth if you rent: $187,203.16; Monthly cost of buying in year 1: $2,418.56; Monthly rent in year 1: $2,000.00; First year buying comes out ahead: 6 years.
This is an estimate based on the inputs and assumptions shown on this page, not professional advice. Check anything with financial, health or safety consequences independently.
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Yes. Pick from 33 currencies and the amounts are labelled to match. The selector does not convert between currencies, so enter prices in your own currency.