Rent vs Buy Calculator
Which leaves you wealthier after the years you'll stay: buying, or renting and investing the difference.
After 10 years
Buying wins by $12,732
Net worth from this choice: buying $291,489, renting and investing $278,757.
- Home value then$634,7693.5% a year
- Loan left then$305,194
- Rent then$3,392/mo3% a year
BuyingRenting and investing
Owning costs $3,213 a month to start
That’s the mortgage ($2,275) plus tax, insurance and upkeep, against $2,600 in rent. Upkeep and tax are the costs most people leave out.
Buying pulls ahead in year 9
Before that, closing and selling costs outweigh what you’ve built. If you might move sooner, renting usually wins.
Year by year
| Year | Buying | Renting | Ahead |
|---|---|---|---|
| 1 | $81,829 | $118,516 | Rent |
| 2 | $101,445 | $134,030 | Rent |
| 3 | $121,886 | $150,063 | Rent |
| 4 | $143,188 | $166,636 | Rent |
| 5 | $165,392 | $183,771 | Rent |
| 6 | $188,540 | $201,492 | Rent |
| 7 | $212,676 | $219,824 | Rent |
| 8 | $237,846 | $238,793 | Rent |
| 9 | $264,100 | $258,428 | Buy |
| 10 | $291,489 | $278,757 | Buy |
Net worth from buying = home value minus selling costs, minus the loan left, plus anything invested when owning cost less than rent. Before taxes; the mortgage interest deduction only helps if you itemize.
Important — please read
This calculator is an educational tool. It shows a simple, fixed-rate projection: it assumes your money grows at the same rate every year with no interruptions, and it ignores taxes, fees, inflation, market volatility, sequence-of-returns risk, and changes to your contributions or circumstances. Real investment returns vary widely year to year and can be negative. Past performance does not predict future results.
The numbers shown are hypothetical illustrations, not a forecast, a promise, or a recommendation, and nothing here is investment, tax, legal, or financial advice or an offer or solicitation to buy or sell any security. Paycheck Paradox is not a registered investment adviser, broker-dealer, or tax advisor.
Before making any financial decision, talk to a qualified professional — a licensed financial advisor, CPA, or attorney — who can account for your full situation. You are solely responsible for your own decisions.
Provided “as is”, with no warranty of accuracy or fitness for any purpose. To the fullest extent permitted by law, Paycheck Paradox accepts no liability for any loss arising from use of, or reliance on, this tool.