Rent vs. Buy Calculator

Explanation of the Calculator

This Rent vs. Buy Calculator helps you compare the costs of renting and buying a home over the first year. It considers factors like monthly rent, annual rent increases, home price, down payment, loan term, interest rate, property taxes, insurance, and maintenance costs.

Monthly Rent ($):

Annual Rent Increase (%):

Home Price ($):

Down Payment (%):

Loan Term (years):

Interest Rate (%):

Property Taxes (% of home price):

Homeowners Insurance ($/year):

Maintenance Costs (% of home price/year):

Basic Example

Let's say we have the following inputs:

• Monthly Rent: $1,500
• Annual Rent Increase: 3%
• Home Price: $300,000
• Down Payment: 20%
• Loan Term: 30 years
• Interest Rate: 4%
• Property Taxes: 1.25%
• Homeowners Insurance: $1,200/year
• Maintenance Costs: 1%

Using these values, the calculator will determine the first-year costs of renting vs. buying:

• First-Year Rent Costs: $1,500 * 12 = $18,000
• First-Year Homeownership Costs: $1,808.30 * 12 ≈ $21,699.60

Glossary

• Down Payment: An upfront payment made when buying a home, usually a percentage of the purchase price.
• Interest Rate: The percentage charged by the lender for borrowing the mortgage amount.
• Loan Term: The length of time over which the mortgage is to be repaid.
• Property Taxes: Taxes paid to the local government based on the value of the property.
• Homeowners Insurance: Insurance that covers damage to the home and protects against liability.
• Maintenance Costs: Regular expenses for repairs and upkeep of the property.
• Amortization Schedule: A table detailing each periodic payment on a mortgage loan, showing amounts applied to principal and interest.