Compare the full cost of renting and buying over 5, 10 or 20 years. It counts the home's value when you sell, selling costs, and what your down payment could earn if you invested it instead.
If you buy
$
$
Cash you pay up front. The rest is borrowed.
%
Yearly interest on a 30-year fixed loan.
%
How fast you expect the home's price to rise (appreciation).
%
Yearly tax as a percent of the home price.
$
Repairs, maintenance and any homeowners association (HOA) dues.
$
One-time fees to get the loan and the home, often 2–5% of the price.
If you rent
$
%
$
%
If you rent, you keep the down payment and can invest it. This is the yearly growth you expect.
%
Most people pay 15% federal tax on long-term investment gains.
Net cost of buying
Net cost of renting
Verdict
Buying: money out and money back
Down payment
Mortgage payments
Property taxes
Upkeep and HOA
Closing costs + 6% selling costs
Home value when you sell
You get back (value minus loan left)
Net cost of buying
Renting: money out and money back
Total rent paid
Renters insurance
Down payment grows to
Investment gains
Tax on those gains
Net cost of renting
Net cost = everything you pay, minus what you get back at the end. This is an estimate: it assumes a 30-year fixed loan, 6% selling costs, and no income-tax deductions.