Rent vs Buy Calculator
To rent or to buy. That is the question and the big-ticket decision to make when moving to a new area. This decision is influenced by many different factors including how long you’ll stay in an area, whether or not you want to deal with selling that home in the future when you do eventually move, how much responsibility you want over repairs, and how attached you are to claiming the place you live in as your own. But the biggest influencer is money. You always have to ask yourself which option is the better financial decision. Since there are so many factors to consider and the future is uncertain at best, it can be difficult to figure out which would financially benefit you more, and that’s where the rent vs. buy calculator comes in handy.
This calculator factors predicted monthly rent, home price, mortgage interest rate, and length of time in the house to show the net spendings and savings for each option over the course of a set amount of time. Purchasing a home comes with many costs beyond the principal and interest payments, mostly making this the more expensive option initially. However, this calculator helps you see how future expenses will play out, and when the tides will turn, making buying the cheaper option.
If you plan on only staying in a house for a few years, the total cost of renting could end up being much less than buying. However, that doesn’t necessarily make renting the best decision. When renting, you aren’t building up equity, and that lost money becomes known as a lost opportunity cost. The calculator will show you lost opportunity costs for both renting and buying.
Test out the rent vs. buy calculator to see which home payment option would be best for you in your area.