CalculationTime

Rent vs Buy Calculator

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Your numbers, formula and explanation together

Rent vs Buy Calculator: $178,603.81 buy cash gap. Rent totals about $114,677.33 over 5 years with 3% annual increases. Buying starts with $80,000.00 down and about $3,554.69/month ($2,654.69 mortgage + $900.00 ownership costs), for $293,281.14 cash out before resale/equity.

Formula applied

The exact method behind this answer

CalculationTime keeps the method visible so the number can be checked instead of blindly trusted.

Rent total sums monthly rent with annual increases. Buy total = down payment + (mortgage payment + taxes/insurance + maintenance) × comparison months. Cash gap = buy total − rent total.
  1. Apply the formulaRent total sums monthly rent with annual increases. Buy total = down payment + (mortgage payment + taxes/insurance + maintenance) × comparison months. Cash gap = buy total − rent total.$178,603.81 buy cash gapRent totals about $114,677.33 over 5 years with 3% annual increases. Buying starts with $80,000.00 down and about $3,554.69/month ($2,654.69 mortgage + $900.00 ownership costs), for $293,281.14 cash out before resale/equity.

Your live breakdown

Current inputs in the calculation

These values come from the controls above and update when the calculator changes.

Current monthly rent
1,800 currency
Rent paid at the start of the comparison.
Annual rent increase
3 percent
Estimated yearly rent change during the comparison period.
Home price
500,000 currency
Purchase price for the buying scenario.
Down payment
80,000 currency
Cash paid upfront for the buying scenario.
Mortgage rate
6.5 percent
Fixed mortgage rate for the buying scenario.
Mortgage term
30 years
Mortgage repayment term.
Taxes and insurance
650 monthly currency
Estimated monthly property tax, insurance and HOA/strata costs.
Maintenance allowance
250 monthly currency
Estimated monthly ownership maintenance allowance.

Resulting answer

$178,603.81 buy cash gap

Rent totals about $114,677.33 over 5 years with 3% annual increases. Buying starts with $80,000.00 down and about $3,554.69/month ($2,654.69 mortgage + $900.00 ownership costs), for $293,281.14 cash out before resale/equity.

Answer
$178,603.81 buy cash gap
Live support
Rent totals about $114,677.33 over 5 years with 3% annual increases. Buying starts with $80,000.00 down and about $3,554.69/month ($2,654.69 mortgage + $900.00 ownership costs), for $293,281.14 cash out before resale/equity.

Assumptions used

What this answer assumes

Cash-flow comparison only. It does not decide whether renting or buying is better after equity, resale value, taxes or opportunity cost.

  • The result compares cash outflow before resale value, equity, appreciation, selling costs, tax effects or investment returns on the down payment.
  • Mortgage payments use a fixed-rate monthly amortisation formula.
  • Ownership costs are simple monthly estimates.
  • Rent increases are applied annually.

Master’s Tip

How to use the result well

This first-pass comparison deliberately shows cash pressure before equity. A later deeper model can add resale, appreciation, tax and investment assumptions.

Printable record

What belongs in the saved calculation

Save the inputs, result, formula, assumptions, page URL and date together so the calculation can be reviewed later.

Current monthly rent
1,800 currency
Rent paid at the start of the comparison.
Annual rent increase
3 percent
Estimated yearly rent change during the comparison period.
Home price
500,000 currency
Purchase price for the buying scenario.
Down payment
80,000 currency
Cash paid upfront for the buying scenario.

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Formula

Rent total sums monthly rent with annual increases. Buy total = down payment + (mortgage payment + taxes/insurance + maintenance) × comparison months. Cash gap = buy total − rent total.

Worked example

At 1,800 monthly rent with 3% annual increases, the rent total over 5 years is compared with an 80,000 down payment plus mortgage and ownership costs for a 500,000 home.

Professional note

This first-pass comparison deliberately shows cash pressure before equity. A later deeper model can add resale, appreciation, tax and investment assumptions.

Regional and unit assumptions

Standard or basis: transparent fixed-rate amortising loan arithmetic with monthly payments. The page does not claim APR disclosure compliance, tax treatment, lender approval, affordability assessment or local mortgage-product rules.

Assumptions and limitations

Methodology & Accuracy

How this calculator is checked

CalculationTime pages are built around visible arithmetic: the formula, assumptions, worked example and practical limitations are shown so the result can be checked rather than simply trusted.

Formula used

Rent total sums monthly rent with annual increases. Buy total = down payment + (mortgage payment + taxes/insurance + maintenance) × comparison months. Cash gap = buy total − rent total.

Standard or basis

Standard or basis: transparent fixed-rate amortising loan arithmetic with monthly payments. The page does not claim APR disclosure compliance, tax treatment, lender approval, affordability assessment or local mortgage-product rules.

Where a calculator follows a named legal, trade or industry standard, that standard is cited visibly. Otherwise the page uses transparent general arithmetic and states its limits.

Master's Tip

This first-pass comparison deliberately shows cash pressure before equity. A later deeper model can add resale, appreciation, tax and investment assumptions.

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These cards are resolved from calculator data, category context and live-route status so the page links to useful next steps without hand-built link clutter.

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Questions

How do you calculate a mortgage payment?

Subtract the down payment from the home price to get the loan amount, convert the annual rate to a monthly rate, then apply the fixed-payment loan formula across the total number of monthly payments.

Does this include property tax and insurance?

The principal-and-interest payment is calculated separately. Optional monthly property tax and insurance fields are then added to show a fuller housing-cost estimate.

What happens if the interest rate is zero?

With a zero rate, the calculator divides the loan amount evenly by the number of monthly payments.

Is this the same as an APR calculation?

No. APR can include fees and disclosure rules. This page uses a simple fixed-rate loan payment formula and states what is excluded.

Why does the term length matter so much?

A longer term spreads the loan across more payments, which usually lowers the monthly payment but can increase total interest paid over the life of the loan.

Calculation note

Rent-versus-buy decisions mix a monthly budget question with a long-term asset question. This page starts with the cash-flow part because that is the easiest assumption to inspect.

Cash outflow is the first comparison

Before estimating appreciation or resale, users need to know how much cash each option requires over the same period.

Equity is intentionally outside this first pass

Keeping resale and equity out of the headline result makes the assumptions visible instead of hiding them in a single overconfident answer.

Sources and further readingConsumer Financial Protection Bureau: Interest rate and APRConsumer Financial Protection Bureau: Credit card interest and APRInvestor.gov: Compound Interest