Compare the true long-term cost of renting vs. buying, including your down payment's opportunity cost, to see which leaves you further ahead.
This tool compares two paths side by side: buying a home and building equity as it appreciates, versus renting and investing the money you would have spent on a down payment and the ongoing cost difference. Every slider on this page has a matching number field next to it: drag to explore, or type exact figures if you already know your numbers. The calculator accounts for mortgage interest, property tax, insurance, maintenance, rent growth, investment returns, and the transaction costs of eventually selling a home.
Buying involves large upfront costs (down payment, closing costs, selling costs later) that get spread across however long you own the home. The longer you stay, the more those fixed costs are diluted by years of building equity and appreciation. That's why buying often looks worse over a short 2-3 year window and better over 10+ years, even with identical home prices and rents. This same opportunity-cost logic is tested directly on the CFP exam and shows up in the finance sections of real estate licensing exams.
This is a financial comparison, not a full picture. It doesn't account for the stability of ownership, freedom to move that renting provides, tax deductions on mortgage interest in some cases, or non-financial preferences. Use it as one input into the decision, not the only one. For a closer look at just the mortgage side of the equation (monthly payment, amortization, and total interest), see our Mortgage Calculator. If you're deciding between a bigger down payment and investing the difference, try our Down Payment vs. Investment Calculator.
Real estate financing, opportunity cost, and time value of money are recurring themes across several exams. Our General Real Estate practice exam covers the national finance content that underlies this calculator, with state-specific versions for California, New York, New Jersey, and Pennsylvania. If you're pursuing a financial planning or advisory credential, the same opportunity-cost concepts appear on the CFP exam, Series 65, and CFA Level 1.
Usually, but not always. It depends heavily on home appreciation vs. investment returns. If your invested down payment would earn more than the home appreciates plus the equity you'd build, renting and investing can still win even over a long horizon.
Buying a home ties up your down payment as equity. Renting frees that money to be invested elsewhere. A fair comparison has to account for what that money could have earned. This is often called the "opportunity cost" of a down payment, a concept covered on the CFP exam.
Long-run U.S. home price appreciation has historically averaged somewhere in the 3-4% annual range, though this varies significantly by market and time period. Adjust the slider or type in your own figure to reflect your local market and risk assumptions.
Yes. Each slider has a paired number input. Type directly into any gold field to enter a precise figure; the corresponding slider and all results update immediately.
Rent-vs-buy math and opportunity cost are core concepts on real estate and CFP exams. Practice for free.
Browse Free Practice Exams →