Rent vs Buy Calculator
Rent isn't “throwing money away,” and a mortgage isn't automatically an investment. This calculator runs both paths — with the renter investing the down payment instead — and shows which one leaves you wealthier, year by year. Free, no sign-up, nothing stored.
Your Numbers
What a similar home rents for in the same area.
Percent costs are per year: tax and maintenance on the home's current value, closing on the purchase, selling on the eventual sale. Investment return applies to the money a renter keeps invested instead.
Which Path Builds More Wealth
Renting comes out ahead over this horizon
- Buying — net worth in 2034
- $211,419
- Renting — net worth in 2034
- $225,359
- Buying catches up
- —
Mortgage payment ≈ $2,023/mo principal & interest; $157,873 of interest paid over 8 years. Both paths spend the same out of pocket — the renter invests the down payment, closing costs, and any month-to-month savings instead.
Rent vs buy is one decision. Lodestar reads your full financial picture and ranks every next move by dollar impact.
Run your free analysisHow the Math Works
The honest way to compare renting and buying is to track the net worth of each path, not just the monthly bills. Both households earn the same income. The buyer's line is sale-net equity: the home's value minus the remaining mortgage, minus what selling would cost. The renter's line is a portfolio that starts with the down payment plus closing costs and, every month, absorbs the difference between the two housing bills — money in when owning costs more that month, money out when renting does. Because out-of-pocket spending is identical on both sides, the higher line at your horizon is simply the wealthier path, with every sunk cost (interest, taxes, maintenance, rent, closing and selling costs) already priced in.
The model ignores the mortgage-interest tax deduction: since the 2017 tax law raised the standard deduction, most homeowners no longer itemize, so for most people the deduction is worth $0. It also ignores PMI (private mortgage insurance), taxes on the renter's investment gains, and taxes or exclusions on the home sale. The mortgage is a 30-year fixed loan; rent steps up once per year at renewal; property tax and maintenance are charged on the home's current (appreciated) value. Tax treatment varies by situation — confirm specifics with a CPA. The same deterministic engine approach powers Lodestar's full analysis.
Questions People Ask
How does the comparison actually work?
Both paths are simulated month by month with identical incomes. The buyer's wealth is home equity net of selling costs (home value minus the remaining mortgage, minus what an eventual sale would cost). The renter's wealth is an investment portfolio: it starts with the down payment plus closing costs, and every month it absorbs the difference between the two housing bills — a contribution when owning costs more that month, a withdrawal when renting does. Because out-of-pocket spending is equalized, whichever line is higher at your horizon is the path that left you wealthier. All of the math is deterministic — the same inputs always produce the same result.
Why does the down payment's opportunity cost matter so much?
A 20% down payment plus closing costs on a $400,000 home is roughly $92,000 that the buyer converts into home equity and the renter can keep invested. At a 7% return that sum alone roughly doubles in a decade, before counting the monthly savings a renter often has early on. Ignoring this — comparing rent to a mortgage payment and stopping there — is the single most common way rent-vs-buy math goes wrong, and it's why this calculator tracks the full net worth of each path instead.
What about the mortgage-interest tax deduction?
This calculator ignores it, on purpose. Since the 2017 tax law roughly doubled the standard deduction, most homeowners no longer itemize, which makes the mortgage-interest deduction worth exactly $0 to them. If you have a large mortgage and do itemize, buying looks somewhat better than shown here. Buying and selling a home has real tax consequences either way — confirm the specifics with a CPA.
What does the breakeven year mean?
It's the first year in which the buyer's net worth catches up to the renter's. Buying starts behind — closing costs are sunk immediately and selling costs would come out of any sale — and typically catches up as the mortgage amortizes and the home appreciates. If you'd likely move before the breakeven year, renting probably leaves you wealthier; if you'd stay well past it, buying probably does. If no breakeven appears, renting stays ahead for your entire horizon under your assumptions.
Do I need an account? Is anything stored?
No account, no sign-up. The calculation runs entirely in your browser and nothing you type is saved or sent anywhere.
Is this financial advice?
No. Lodestar Wealth provides education and tools, not investment advice, and nothing here is a recommendation to buy or sell any security or property. The comparison is an illustration built from your own assumptions — actual rents, home prices, rates, and returns will differ. Buying or selling a home also has tax consequences; confirm those with a CPA.
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Rent vs Buy Is One Lever. Your Finances Have a Dozen.
Debt payoff order, employer match, emergency fund sizing, account types — each one moves your net worth too. Lodestar reads your actual numbers and hands you a ranked plan with the dollar impact of every move. Run your free analysis →