Rent vs buy calculator
Simulate buying against renting-and-investing year by year: monthly amortisation, maintenance, house-price growth, rent growth, investment return (opportunity cost), selling costs and inflation are all editable, and the output compares net worth, the gap, the break-even year and the net present value of buying.
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Buying and renting assumptions
All money is handled as integer cents; the mortgage amortises monthly and settles at year end, while rent and maintenance step once a year and the cash-flow difference is invested by the renter at year end.
Comparison
10,269.36900,000.002,100,000.0090,000.001,848,484.801,596,970.08557,967.421,562,308.773,210,720.002,318,182.54892,537.464 years151,200.55674,996.23Year by year
Buying net worth = price × (1 − selling costs) − remaining loan; renting net worth = the investment portfolio. The year the gap turns positive is the break-even point.
| Year | Home value | Loan balance | Buying cost | Rent | Net worth, buy | Net worth, rent | Gap |
|---|---|---|---|---|---|---|---|
| 1 | 3,090,000.00 | 2,064,285.37 | 153,232.32 | 84,000.00 | 963,914.63 | 1,079,032.32 | -115,117.69 |
| 2 | 3,182,700.00 | 2,027,041.52 | 154,132.32 | 86,520.00 | 1,092,004.48 | 1,168,225.29 | -76,220.81 |
| 3 | 3,278,181.00 | 1,988,202.96 | 155,059.32 | 89,115.60 | 1,224,414.42 | 1,257,533.52 | -33,119.10 |
| 4 | 3,376,526.43 | 1,947,701.43 | 156,014.13 | 91,789.07 | 1,361,294.47 | 1,346,909.25 | 14,385.22 |
| 5 | 3,477,822.22 | 1,905,465.71 | 156,997.58 | 94,542.74 | 1,502,800.07 | 1,436,302.28 | 66,497.79 |
| 6 | 3,582,156.89 | 1,861,421.51 | 158,010.54 | 97,379.02 | 1,649,092.24 | 1,525,659.85 | 123,432.39 |
| 7 | 3,689,621.60 | 1,815,491.44 | 159,053.89 | 100,300.39 | 1,800,337.73 | 1,614,926.55 | 185,411.18 |
| 8 | 3,800,310.24 | 1,767,594.73 | 160,128.54 | 103,309.40 | 1,956,709.31 | 1,704,044.22 | 252,665.09 |
| 9 | 3,914,319.55 | 1,717,647.16 | 161,235.42 | 106,408.69 | 2,118,386.00 | 1,792,951.83 | 325,434.17 |
| 10 | 4,031,749.14 | 1,665,560.95 | 162,375.52 | 109,600.95 | 2,285,553.21 | 1,881,585.44 | 403,967.77 |
| 11 | 4,152,701.61 | 1,611,244.51 | 163,549.81 | 112,888.98 | 2,458,403.07 | 1,969,877.98 | 488,525.09 |
| 12 | 4,277,282.66 | 1,554,602.35 | 164,759.34 | 116,275.65 | 2,637,134.66 | 2,057,759.23 | 579,375.43 |
| 13 | 4,405,601.14 | 1,495,534.88 | 166,005.15 | 119,763.91 | 2,821,954.24 | 2,145,155.65 | 676,798.59 |
| 14 | 4,537,769.17 | 1,433,938.27 | 167,288.33 | 123,356.83 | 3,013,075.52 | 2,231,990.26 | 781,085.26 |
| 15 | 4,673,902.25 | 1,369,704.21 | 168,610.01 | 127,057.54 | 3,210,720.00 | 2,318,182.54 | 892,537.46 |
What this tool does
- Deciding whether to rent or buy: a 3,000,000 home with 30% down, a 30-year 4.2% mortgage and 7,000 rent — assuming 3% annual price growth and a 2% investment return, buying is about 892,000 ahead after 15 years and breaks even in year 4.
- See what investing the money instead would do: raise the investment return from 2% to 8% and the conclusion often flips, because the opportunity cost of a 900,000 down payment compounds fast.
- Run a sensitivity check: set price growth to 0% and see whether break-even still falls inside your horizon, which tells you how much house-price risk you can carry.
- Quantify the one-off costs: put 3% in for taxes, agency fees and fit-out, then try 6%, and watch how many years the break-even point moves back.
Example
Input
Home 3,000,000, 30% down, 4.2% mortgage over 30 years, 3% one-off costs, 1% maintenance, 3% price growth, 7,000 rent growing 3%, 2% investment return, 2% selling costs, 2% inflation, 4% discount rate, held 15 years
Output
Down payment 900,000.00, loan 2,100,000.00, monthly payment 10,269.36; total payments 1,848,484.80 (including 1,596,970.08 of interest), maintenance 557,967.42, rent 1,562,308.77; after 15 years the buyer is worth 3,210,720.00 against 2,318,182.54 for the renter, a gap of 892,537.46; break-even in year 4; NPV 151,200.55 (674,996.23 after inflation)
In year 1 buying costs 153,232.32 (123,232.32 of payments plus 30,000.00 of maintenance) while renting costs only 84,000, so the gap starts negative; as the loan amortises and prices rise, buying overtakes in year 4.
Frequently asked questions
Why can’t I just compare total spending?
Because the buyer’s money turns into home equity while the renter’s is spent. The tool compares the buyer’s year-end equity (net of selling costs and the remaining loan) with the renter’s investment portfolio, which is the like-for-like comparison.
Why does the investment return change the answer?
The renter invests the down payment and each year’s cash-flow difference, so a higher return compounds that money faster. When the investment return clearly beats price growth plus the leverage effect of the mortgage, renting pulls ahead — in the example, moving the return from 2% to 8% flips the conclusion.
How is the break-even year calculated?
The mortgage amortises monthly while maintenance and rent settle yearly, and each year compares buying net worth minus renting net worth. The first year the gap reaches zero or above is the break-even point; sell before it and renting would usually have been better.
How should I read the net present value row?
It discounts the incremental cash flows of buying — the down payment and one-off costs, the extra spending each year, and the equity recovered on sale — back to today at your discount rate. A positive NPV means buying wins at that rate; a higher rate makes future equity worth less and buying less attractive.
Why are mortgage interest and payments listed separately?
Only part of a mortgage payment is a cost. Interest is money gone, while principal repayment converts cash into home equity. Splitting them shows the difference between the monthly cash pressure and the real cost of ownership.
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