Rent vs. Buy Calculator

Use our calculator to make the best decision about renting versus buying

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How Does LendingTree Get Paid?

LendingTree is compensated by companies on this site and this compensation may impact how and where offers appear on this site (such as the order). LendingTree does not include all lenders, savings products, or loan options available in the marketplace.
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How to use our rent vs. buy calculator

If you’re considering renting versus buying a house, our rent vs. buy calculator can help. You can compare homebuying and renting expenses over a set time and crunch the numbers to see if you’re ready for homeownership, or if you need to step back and wait awhile to buy.

You’ll only need four pieces of information to get started:

  1. Your current ZIP code (or the ZIP code you’re thinking of buying in)
  2. Your desired home price
  3. Your target rent payment
  4. How long you plan to stay in the home

After you’ve entered this information, the calculator will give you a buy or rent recommendation.

What a buy recommendation means

The calculator will recommend you buy a home if the costs of homeownership are less than renting, based on how long you plan to live in the home. Typically, the longer you plan to live in a home, the more buying one makes sense.

What a rent recommendation means

If it costs more for you to buy a home than to rent it for the length of time you plan to stay in the home, you’re likely to get a “rent” recommendation. If you’re in the military or think you may be moving (for a job or for better weather) in the near future, the cost of buying and then selling a home may not be worth it

Our rent vs. buy calculator’s “advanced options:” What you should know

The calculator makes some assumptions about your down payment that are important to know to avoid any surprises. Here’s a quick look under the hood of the “advanced options” section:


There are a number of homebuying factors that can affect the rent vs. buy calculator’s recommendations, and this section lets you fine tune the numbers based on the following:

Down payment. The calculator is preset with a 20% down payment. Be sure to adjust it if you don’t have that much saved up (there are home loan programs with minimum down payments ranging from 0% to 3.5%).
Interest rate. Check out current mortgage rates to get the most accurate recommendation.
Mortgage term. A 30-year term gives you the lowest monthly payment, but you can choose a 15-year term if you’re able to afford the higher payment that comes with a shorter term.
Property taxes and home insurance. The calculator will estimate property taxes and homeowners insurance based on costs that are common for your ZIP code. If you have exact numbers for a specific house, you can enter them here.
HOA fees. If you’re buying a home in a subdivision controlled by a homeowners association, you’ll enter the monthly dues here.
Annual maintenance. As a homeowner, you’re on the hook for maintenance and repairs. A good rule of thumb is to set aside 1% of your loan amount per year for upkeep or fixup expenses.
Annual home appreciation. The calculator assumes your house will appreciate at a rate of 3% per year. However, that figure may be much higher or lower depending on your local real estate market.
Cost of selling your home. One of the drawbacks to homeownership is that you typically pay the full 6% real estate commission to the agents that market and help you find a buyer for your home.
Closing costs. You’ll typically pay about 2% toward closing costs including title fees, inspections, staging fees and other expenses related to selling your home. The amount may vary depending on how much it takes to get your home ready to sell.
Investment return rate. This can vary based on the real estate market in your area, but the calculator assumes you’ll get a 3% investment return rate.
Inflation. Our calculator assumes a 2% inflation rate. Low inflation is good because it keeps interest rates low and gives you more spending power. High inflation puts the squeeze on your budget and reduces home affordability.

Tax options

There are number of tax benefits of homeownership, and if you have your tax info handy, you can also add that information to the following rent vs. buy calculator fields:

Annual income. This is how much you make before taxes, and should include the income of anyone else applying with you to buy a home.

Marginal income tax rate. Your tax professional may be able to help you with this question if you don’t know the answer based on your recent tax returns.

Average savings and loan tax rate. This field allows the calculator to compare the benefit of keeping your down payment money in a savings account versus investing it in a home, and is preset to 5%.

Other tax deductions. If you have any other tax deductions you typically take, you can enter them here. The calculator will assume at least $2,500 of additional deductions.

Married box. The married box will tell the computer what standard deductions to choose based on your marriage status.

Renting info

This section focuses on rental costs and allows you to tweak the following fields:

Rental inflation. If you’re not sure about this, you might want to ask a real estate agent that specializes in home rentals in your area. Otherwise, the calculator will assume your rent increases 3% every year.

Annual rental insurance. Any premium you pay for rental insurance should be entered here or it will default to $180 per year.

How to decide if you should buy or rent a home now

You should buy if:You should rent if:
You plan to live in the home long termYou have moving plans in the near future
Your finances are in good shape and you have money saved for a down paymentYour employment or income is unstable or unpredictable
You have extra room in your budget to cover home repairs and maintenanceYou have low credit scores or you don’t have money saved for a down payment

Pros and cons of buying vs. renting a home

If you get a “buying” recommendation from the calculator, before you apply for a mortgage, take some time to mull over the pros and cons of buying versus renting a home:

Pros of buying a homeCons of owning a home

  You build home equity with each mortgage payment

  You’re responsible for upkeep and repairs to your home

  You can take advantage of tax benefits

  You could lose money if you have to sell the home due to financial hardship

  You can improve and renovate the home however you wish

  Your home's value could drop