Rent vs Buy Comparison Simulator
Compare the total cost of renting versus buying a home, factoring in the mortgage, property tax, maintenance, and resale value, and see the break-even year when buying starts to pay off.
Main Cost Items Unique to Owning a Home
Unlike renting, owning a home involves the following costs and changes in asset value. This tool factors in all of them when comparing the total cost against renting.
| Mortgage Repayment | The core expense of buying: repaying the amount financed (property price minus down payment) through equal installment payments. The interest rate and loan term have a major effect on the total amount repaid. |
|---|---|
| Property Tax | A tax levied every year as long as you own real estate, based on the assessed value of the property. This cost does not exist when renting. |
| Maintenance Reserve | Condos require a monthly management fee and maintenance reserve; houses require setting aside funds for future repairs. This is comparable to a renter's management fee, but calculated differently. |
| Resale Value (Asset Value) | A home remains an asset you can eventually sell. The building's value depreciates over time, but retaining an asset is an advantage renting does not offer. |
Tips
- The break-even year is a rough guide for when buying starts to cost less overall than renting — it matters most if you're unsure whether you might move again.
- The depreciation rate is only a simplified estimate. Actual resale value can vary a lot based on location and building age, so treat a real appraisal as the final word.
- If the mortgage term is longer than the comparison period, some balance will still be outstanding at the end — that remaining debt is subtracted from the resale value in the calculation.
- Property tax and maintenance costs vary widely between condos and houses, so entering figures close to a real quote will make the estimate more accurate.
- Setting the rent increase rate to 0% compares a simple flat-rent scenario. In areas where rent hikes are likely, try running the numbers again with 1-2% to see how it changes the outcome.
Frequently Asked Questions
Side Note — Why the "Rent vs Buy" Debate Never Really Settles
The question of whether renting or buying is the better deal has been argued for decades, yet it's never fully settled economically. That's because so many variables — mortgage rates, rent growth, future real estate prices, the chance you'll move — all shape the outcome, and every one of them depends on predicting the future. The break-even year this tool shows is only an estimate under the assumptions you've entered.
Still, running the numbers is worthwhile, because many people decide based on nothing more than a vague sense that owning "feels" more secure or that renting "feels" more flexible. Once you actually work through the total mortgage payments, taxes, and maintenance costs, and subtract the resale value that remains as an asset, the result often looks quite different from that gut feeling.
One factor that's easy to overlook is the asset value a home retains. With renting, every payment simply disappears; with buying, the principal portion of each payment builds equity that you can recover, at least in part, when you sell. But because the building itself loses value over time, how much that depreciation matters ends up depending heavily on the land's value in that particular location — and that very uncertainty is a big part of why this debate never fully resolves.