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Use our rent vs. buy calculator to determine whether it's less expensive to rent or buy a house.

RENT VS. BUY CALCULATOR

Should I rent or buy a house?

Use our rent vs. buy calculator to determine if it's less expensive to rent or buy a house.

Cost to Rent

$XXX,XXX monthly

$XXX,XXX total

Cost to Buy

$XXX,XXX monthly

$XXX,XXX total

Buying Costs

All the costs that come with purchasing your prospective home

Home price

The price you're budgeting for a home

Down payment

How much cash you'll pay up front

Mortgage rate

Your rate for a fixed-rate mortgage

Mortgage term

The length of your mortgage loan

1015202530

Property tax rate

The average property tax rate in the U.S. is 1.1%

Closing costs

2% to 6% of loan amount (includes appraisals, inspections, lender fees, etc.)

Homeowners insurance

Paid annually as a percentage of home price

Estimated maintenance costs (per year)

How much you'll spend on regular maintenance and replacement of appliances, systems, and more

Renovations (per year)

Any home renovations you foresee making

Utility charges (per month)

Electricity, gas, water, waste, landscaping, and more

Common/HOA fees (per month)

Census data puts the average HOA fee around $170 per month

Renting Costs

The total amount you'll pay in rental fees

Rent

How much you can pay per month

Rent increase

How much you anticipate your rent going up each year upon renewal

Security deposit/move-in fees

Any fee or deposit, refundable or not

Broker fee

Your broker's commission, if applicable

Renter's insurance (per month)

Sometimes optional, but can protect your belongings in a rental unit

How to use the calculator

It can be tough to make up your mind about whether to rent or buy. To use our calculator, you just need the following info.

• Sale price of the home
• Value of your down payment
• Term and rate of your mortgage
• Rent price for a comparable home

There are additional fields for taxes, insurance, and other fees if you have that information available, too. To make things easier, we pre-filled all the numbers with U.S. averages that you can default to in case there’s any info you’re missing.

Hover over the question marks next to a given field for a description.

Remember, the answer to “how much house you can afford?” will probably vary during your life, and most people ask and answer the question at least a few times. Outside circumstances can affect the answer, like whether your area is generally more or less expensive, or if you suddenly have more money for a down payment.

Methodology

To come up with a cost comparison, our rent vs. buy calculator factors in common costs associated with renting and buying a house.

For renters, we noted one-time payments for a security deposit or move-in fee, as well as a broker’s fee if applicable. We also noted recurring payments for rent and renter’s insurance, as well as a factor for annual rent increases.

Buying costs are more varied. We accounted for one-time payments for closing costs and the home’s down payment, as well as recurring costs like property taxes, homw insurance, neighborhood association fees, maintenance, and PMI if you put down less than 20%.

Other ways to calculate rent vs. buy numbers

Using a calculator is the quickest and easiest way to assess whether you should rent or buy, but there are more methods to answer this question, like the 5% rule and the price-to-rent ratio.

5% rule

The 5% rule is an assessment to weigh the costs of home ownership to monthly rent. Canadian portfolio manager Ben Felix developed the comparison to help ease the decision between renting and buying.

To get your threshold number, multiply your home’s value by 5%, then divide that number by 12.¹ If the monthly rent is less than this number, then it’s cheaper to rent. If it’s not, then it’s cheaper to buy. To calculate his 5% rule, Felix used the estimated costs of property taxes, maintenance, and the cost of capital — that is, the equity value of the home plus debt (interest) you’d owe on a mortgage.

Price-to-rent ratio

The price-to-rent ratio is a comparison of home prices to rent prices to gauge the economic cost of either. Divide the median home price by the median annual rent to get a price-to-rent ratio for a particular location.² It’s one way to assess the affordability of a market, but it doesn’t consider the total cost of either renting or buying.

A price-to-rent ratio of 15 or fewer shows that rent prices are higher and it’s better to buy. A ratio of greater than 15 means it’s better to rent instead — the higher the number, the more the signs point toward renting as the best choice.

Whether you decide to rent or buy, make more selling your home with 91�ƽ��

Things can change in an instant. Especially in today’s market, the financial incentive to rent or buy a house can shift with the wind, and the price to rent or buy will change over time. Lucky for you, anytime is a perfect time to buy and sell with 91�ƽ��, so you don’t have to lift a finger when it comes to moving on to your new home.

Sources:

1. PWL Capital: “Rent or Own Your Home? A Handy 5% Rule.” Felix, Benjamin. Accessed 9 March 2023.
2. Investopedia: “Price-to-Rent Ratio: Determining if It’s Better To Buy or Rent.” Hargrave, Marshall. Accessed 9 March 2023
3. Census Bureau: “American Housing Survey (AHS).” Accessed 9 March 2023
4. Census Bureau: “American Community Survey, Table S2506, Financial Characteristics for Housing Units With a Mortgage.” Accessed 8 March 2023
5. IRS: “IRS provides tax inflation adjustments for tax year 2023.” Accessed 8 March 2023.
6. Business Insider: “The average mortgage interest rate by state, credit score, year, and loan type.” Kneuven, Liz and Tarpley, Laura Grace, CEPF. Accessed 8 March 2023.
7. Trading Economics: “United States House Price Index YoY.” Accessed 8 March 2023.
8. Federal Reserve Bank of St. Louis: “Average Sales Price of Houses Sold for the United States.” Accessed 8 March 2023.