Frequently Asked Questions

How do I use the Rent vs Buy Calculator?

Simply enter your property details (price, down payment, interest rate, loan term), your rental costs (monthly rent and annual increase rate), property costs (taxes, insurance, maintenance, HOA), and assumptions (property appreciation, time horizon). The calculator will automatically compare the costs and show you a detailed breakdown.

What information do I need to use the calculator?

For the buying scenario, you'll need:

• Property purchase price
• Down payment amount or percentage
• Mortgage interest rate (APR)
• Loan term (years)
• Annual property taxes
• Annual home insurance cost
• Maintenance costs (as % of property value)
• HOA fees (if applicable)

For the renting scenario, you'll need:

• Monthly rent amount
• Expected annual rent increase rate

Is my data stored or tracked?

No. All calculations are performed entirely in your browser (client-side). We do not collect, store, or transmit any of the information you enter. Your calculations remain completely private. See our Privacy Policy for more details.

What does "Cost Comparison" mean?

The cost comparison shows which option (renting or buying) results in lower total costs over your specified time horizon, based purely on the financial inputs you provide. It does not account for lifestyle factors, flexibility, or other non-financial considerations.

What is the break-even point?

The break-even point is the number of years after which buying becomes financially better than renting, based on your inputs. This occurs when the equity built up and property appreciation offset the higher initial costs of buying.

What is net worth in this context?

Net worth represents the financial position after the time horizon. For buying, it's the property value minus remaining mortgage minus total costs paid. For renting, it's the negative of total rent paid (assuming no investment of savings). This is a simplified comparison and doesn't account for investment returns on saved money.

What does equity mean?

Equity is the portion of the property you actually own. It equals the current property value minus the remaining mortgage balance. As you pay down your mortgage and the property value appreciates, your equity increases.

How accurate are the results?

The calculator provides estimates based on the assumptions you enter. Actual results will vary based on real-world factors including market conditions, actual interest rates, property value changes, rent increases, unexpected costs, and other variables. Always verify figures with qualified professionals.

What assumptions does the calculator make?

The calculator assumes:

• Monthly mortgage payments and monthly compounding
• Fixed interest rates over the loan term
• Linear property appreciation (constant annual percentage)
• Linear rent increases (constant annual percentage)
• Fixed property costs (taxes, insurance, maintenance) that may increase with property value
• No one-time transaction costs (closing costs, realtor fees, moving expenses)

Does the calculator account for closing costs and selling fees?

No. The calculator focuses on ongoing costs and does not include one-time transaction costs such as closing costs when buying (typically 2-5% of property value) or realtor fees and other costs when selling (typically 6-10% of sale price). These costs can significantly impact the comparison, especially for shorter time horizons.

What about the opportunity cost of the down payment?

The calculator shows the financial comparison but doesn't explicitly account for what you could earn by investing your down payment elsewhere (e.g., stocks, bonds). If you have strong investment alternatives, the opportunity cost of tying up capital in a property should be considered separately.

What if I plan to move before the time horizon ends?

Adjust the time horizon to match your expected stay. Buying typically becomes more favorable the longer you stay, due to equity build-up and property appreciation. If you plan to move frequently, renting may be more cost-effective when accounting for transaction costs (closing costs, realtor fees, etc.) that aren't included in this calculator.

How do I know what property appreciation rate to use?

Property appreciation rates vary significantly by location, market conditions, and time period. Historical averages are often 2-5% annually, but can be higher or lower. Consider using conservative estimates (2-3%) and running different scenarios to see how results change. Consult local real estate professionals for market-specific information.

What if my interest rate is 0%?

For zero-interest loans, the calculator divides the loan amount by the number of months to calculate equal monthly payments. No interest is charged, so all payments go toward principal.

Should I include tax benefits from mortgage interest deduction?

If mortgage interest is tax-deductible in your area, you can enter your marginal tax rate in the "Tax Rate" field. The calculator will account for the tax benefit. If mortgage interest is not tax-deductible where you live, leave this field at 0.

Is this calculator free to use?

Yes, the calculator is completely free to use. There are no sign-ups, no fees, and no hidden costs.

Does this calculator provide financial advice?

No. This calculator provides estimates for informational purposes only and does not constitute financial, legal, or real estate advice. The results are based on mathematical formulas and the assumptions you provide. Always consult with qualified professionals before making property or financial decisions.

What factors should I consider beyond the calculator results?

While this calculator focuses on financial costs, you should also consider: your long-term plans (how long you'll stay in the area), lifestyle preferences (flexibility of renting vs. stability of owning), maintenance responsibilities, market conditions, personal financial situation (emergency fund, other debts, etc.), and transaction costs not included in the calculator.

Can I use this calculator for commercial properties?

The calculator is designed for residential property comparisons. While you can enter commercial property data, the assumptions and formulas are optimized for residential real estate. Commercial properties may have different tax implications, depreciation benefits, and cost structures that aren't accounted for.