Rent Vs Buy Mortgage Calculator: Rent or Buy Home?

Rent Vs Buy Mortgage Calculator Sign

This calculator will calculate and compare the cost of renting to the cost of buying a home.

Unlike other online rent or buy calculators that are biased in favor of buying a home -- because they are created for mortgage brokers and real estate agents -- this calculator includes all of the costs of homeownership that self-serving sellers often leave out of the renting versus buying equation.

Finally, the calculated results also include a button to create a printer-friendly report.

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Rent Vs Buy Mortgage Calculator

Calculate and compare the cost of renting to the cost of buying a home, which includes the costs of homeownership that sellers leave out of their sales presentations.

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Selected Data Record:

A Data Record is a set of calculator entries that are stored in your web browser's Local Storage. If a Data Record is currently selected in the "Data" tab, this line will list the name you gave to that data record. If no data record is selected, or you have no entries stored for this calculator, the line will display "None".

DataData recordData recordSelected data record: None

Load or Clear Sample Entries:

To load sample entries that you can change as needed, tap the "Sample" button. To clear sample entries, tap the "Clear" button.

Rental and Mutual Section

Rental and Mutual Section:

This section is for entering rent-related amounts as well as for entering factors that apply to both renting and buying.

Monthly rent:Rent pmt:Monthly rent:Monthly rent payment:

Monthly rent payment:

Enter the amount of the monthly rent payment. Enter as a dollar amount, but without the dollar sign and any commas.

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Utilities:Monthly utilities:Monthly utilities not included in rent:Monthly utilities not included in rent payment:

Monthly utilities not included in rent payment:

Enter the total amount of any monthly utilities you pay that are not included in the rent payment (heat, laundry, electric, trash removal, garage rental, etc.). Enter as a dollar amount, but without the dollar sign and any commas.

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Insurance:Rental insurance:Monthly rental insurance:Monthly rental insurance:

Monthly rental insurance:

Enter the monthly rental insurance premium. Enter as a dollar amount, but without the dollar sign and any commas. If you are not paying insurance on the contents of your apartment, leave this field blank.

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Inflate rate:Inflation rate:Expected annual inflation rate:Expected annual inflation rate:

Expected annual inflation rate:

Enter the annual inflation rate. Enter as a percentage, but without the percent sign (for .04 or 4%, enter 4). This is used to inflate the costs of rent, insurance, maintenance, dues and property taxes for the length of time you plan to stay in the purchased home.

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Savings ROI:Savings ROI:Rate you expect to earn on savings:Interest rate you expect to earn on savings:

Interest rate you expect to earn on savings:

Enter the annual interest rate you expect to earn on the down payment and closing costs you will invest if you decide to rent instead of buy. Enter as a percentage, but without the percent sign (for .07 or 7%, enter 7).

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Home Buying Section

Home Buying Section:

Enter your anticipated home purchase and ownership costs in this section.

Home price:Price of home:Purchase price of home:Purchase price of home:

Purchase price of home:

Enter the total purchase price of the home -- not including closing costs. Enter as a dollar amount, but without the dollar sign and any commas.

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Down pmt:Down payment:Down payment amount:Down payment amount:

Down payment amount:

Enter the amount you will have available to put down on the house after you have set aside the cash you will need to pay the closing costs. Enter as a dollar amount, but without the dollar sign and any commas.

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Mtg years:Mortgage years:Mortgage term in years:Length of mortgage term in years:

Length of mortgage term:

Enter the number of years you are financing the home for. The longer it takes you to repay the home loan, the more you will pay in finance charges.

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Mtg rate:Mortgage rate:Mortgage's annual interest rate:Mortgage's annual interest rate:

Mortgage's annual interest rate:

Enter the annual interest rate of the mortgage. Enter as a percentage, but without the percent sign (for .0625 or 6.25%, enter 6.25).

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Points:Mortgage points:Points on purchase of home:Discount points on purchase of home:

Discount points on purchase of home:

Discount points are paid up front in order to reduce the interest rate of your mortgage. Each point represents 1% of your mortgage balance. Enter as a percentage, but without the percent sign (for .01 or 1%, enter 1).

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Origination:Origination fees:Origination fee percentage:Mortgage origination fee percentage:

Mortgage origination fee percentage:

Enter the percentage (often as high as 1% of the loan amount) that the lending institution will charge for processing and originating a loan. Enter as a percentage, but without the percent sign (for .01 or 1%, enter 1).

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Loan costs:Other loan costs:Other loan costs:Other loan costs:

Other loan costs:

The total of other loan related costs, such as filing fees, transfer fees, appraiser fees, etc. Enter as a dollar amount, but without the dollar sign and any commas.

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PMI %:PMI percent:Private mortgage insurance (PMI %):Private mortgage insurance (PMI %):

Private mortgage insurance (PMI %):

If your downpayment is less than 20% of the value of the home you are buying, you may be required to pay mortgage insurance of somewhere between 0.2% and 0.5% of your principal balance each month. Enter as a percentage, but without the percent sign (for .004 or .4%, enter .4).

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Insure rate:Insurance rate:Homeowner's insurance rate:Homeowner's insurance rate:

Homeowner's insurance rate:

Your homeowner insurance rate -- entered as a percentage of the value of your home. Typical rate is 0.5%. Enter as a percentage, but without the percent sign (for .005 or .5%, enter .5).

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Assoc dues:Association dues:Monthly association dues:Monthly homeowner association dues:

Monthly homeowner association dues:

If will be forced to join a homeowner association when you purchase the home, enter your monthly dues in this field. Enter as a dollar amount, but without the dollar sign and any commas.

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Maintenance:Maintenance avg:Average monthly maintenance:Average monthly maintenance cost:

Average monthly maintenance cost:

Enter the amount you expect to spend on repairing and maintaining your home. A rule of thumb is 1% of the purchase price of the home per year. So if the home price is $200,000, the monthly maintenance costs you should budget for would be $166.67 (200000 X .01 ÷ 12). Enter as a dollar amount, but without the dollar sign and any commas.

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Utilities:Utilities avg:Average monthly utility expense:Average monthly home utility expense:

Average monthly home utility expense:

Enter the amount you expect to spend on utilities each month (fuels, electric, trash, water & sewer, etc.). According to a recent study by the Census Bureau, the average utility costs for a home ran about 1.5% of the purchase price per year. So if the home price is $200,000, the monthly utility costs you should budget for would be $250.00 (200000 X .015 ÷ 12). Enter as a dollar amount, but without the dollar sign and any commas.

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Ann prop tax:Annual prop tax:Annual property tax:Annual property tax:

Annual property tax:

Enter the amount of property taxes you expect to pay each year. Property taxes typically run about 1.1% of the home price per year. So if the home price is $200,000, the annual property tax costs you should budget for would be $2,200.00 (200000 X .011). Enter as a dollar amount, but without the dollar sign and any commas.

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Inc tax rate:Income tax rate:State plus Federal income tax rate:Combined state and federal income tax rate:

Combined state and federal income tax rate:

Enter your combined state and federal income tax percentage rate. Enter as a percentage, but without the percent sign (for .28 or 28%, enter 28).

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Apprec rate:Appreciation rate:Annual appreciation rate:Expected annual appreciation rate:

Expected annual appreciation rate:

Enter the percentage amount you expect your house to appreciate by each year. Enter as a percentage, but without the percent sign (for .03 or 3%, enter 3).

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Own years:Ownership years:Years you will stay at this property:Number of years you will stay at this property:

Number of years you will stay at this property:

Enter the number of years you expect to rent or own the property you are considering. Typically, if you plan to move out of a home in less than 5 years from the date of purchase, you may be better off renting. That is because the first 5-years of mortgage payments are mostly interest.

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Realtor rate:Commission rate:Realtor commission rate:Realtor commission rate:

Realtor commission rate:

Enter the percentage of your home selling price that you expect to pay a real estate agent or broker when it is time to sell your home. Enter as a percentage, but without the percent sign (for .07 or 7%, enter 7).

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Rent Vs Buy
RentBuy
Pmt:Pmt:Payment:Payment:

Rent payment:

This is the monthly rent payment as entered in the top of the rent vs buy mortgage calculator.

Pmt:Pmt:Payment:Payment:

House payment:

This is the monthly principal and interest (PI) payment based on your entered mortgage amount, interest rate, and loan term.

Renting CostsBuying Costs
Pmts:Pmts:Rent pmts:Rent payments:

Rent payments:

This is the inflation-adjusted total of all rental payments for the number of years you plan to stay in the purchased house.

Int:Int:Interest:Interest cost:

Interest cost:

This is the total of all interest payments you will pay on your mortgage for the number of years you plan to stay in the purchased house.

Insure:Insure:Insurance:Insurance:

Rental insurance:

This is the inflation-adjusted total of all rental insurance premiums for the number of years you plan to stay in the purchased house.

Insure:Insure:Insurance:Insurance:

Homeowner's insurance:

This is the inflation-adjusted total of all homeowner insurance premiums for the number of years you plan to stay in the purchased house.

Util:Util:Utilities:Utilities:

Rental utilities:

This is the inflation-adjusted total of all estimated rental utilities for the number of years you plan to stay in the purchased house.

Util:Util:Utilities:Utilities:

Homeowner's utilities:

This is the inflation-adjusted total of all estimate household utility expenses for the number of years you plan to stay in the purchased house.

  Close:Close:Closing:Closing costs:

Closing costs:

This is the inflation-adjusted total of all estimated household utility expenses for the number of years you plan to stay in the purchased house.

  Prop tax:Prop tax:Prop taxes:Property taxes:

Property taxes:

This is the inflation-adjusted total of all property tax payments for the number of years you plan to stay in the purchased house.

  Maint:Maint:Maintenance:Maintenance:

Maintenance:

This is the inflation-adjusted total of all estimated home maintenance expenses for the number of years you plan to stay in the purchased house.

  Assoc:Assoc:Assoc. dues:Association dues:

Association dues:

This is the inflation-adjusted total of all homeowner association dues for the number of years you plan to stay in the purchased house.

  PMI:PMI:PMI:PMI:

Private Mortgage Insurance (PMI):

This is the total of all estimated Private Mortgage Insurance (PMI) payments for the number of years you plan to stay in the purchased house.

  Sale:Sale:Sale cost:Selling cost:

Selling cost:

This is the estimated real estate commission you will need to pay when you are ready to sell the purchased house.

Total:Total:Total cost:Total cost:

Total rent cost:

This is the inflation-adjusted total of the estimated cost of renting for the number of years you plan to stay in the purchased house.

Total:Total:Total cost:Total cost:

Total buy cost:

This is the inflation-adjusted total cost of buying and owning the home for the number of years you plan to stay in it.

Renting BenefitsBuying Benefits
Int earn:Int earn:Int earned:Interest earned:

Interest earned:

This is the total interest you expect to earn on the investment of the closing costs and down payment that you would not have to pay out if you chose to rent instead of buy.

Tax save:Tax save:Tax savings:Tax savings:

Tax savings:

This is the estimated tax savings you will realize from being able to deduct the interest charges from your taxable income. Please keep in mind that if you paid cash for the home there would be no interest charges, and therefore no tax savings. When you pay interest charges on a mortgage, you are actually paying $1 of interest charges to save 25¢ (if you are in a 25% tax bracket), which does not make any sense.

  Apprec:Apprec:Appreciation:Appreciation:

Appreciation:

This is how much you expect the value of your home to increase during the period of time you plan to stay in home. Please keep in mind what happened to home values in 2009. Contrary to what mortgage brokers and real estate agents want you to believe, home values are not guaranteed to increase over time.

Total:Total:Total:Rent benefits:

Rent benefits:

This is the total benefits of renting for the time you plan to stay in the purchased house.

Total:Total:Total:Buy benefits:

Buy benefits:

This is the total benefits of buying a home for period of time to plan to stay in it.

Net Rent ResultsNet Buy Results
Cost:Cost:Net cost:Net cost:

Net rent cost:

This is the net cost of renting (cost minus benefits) for the period of time you plan to stay in the purchased house.

Cost:Cost:Net cost:Net cost:

Net buy cost:

This is the net cost of buying a home (cost minus benefits) for the period of time you plan to stay in it.

Save:Save:Savings:Savings:

Rent savings:

If the cost to rent is less than the cost to buy, this field will display the estimated savings. Otherwise if renting will cost you more than buying, this field will display n/a.

Save:Save:Savings:Savings:

Buy savings:

If the cost to buy is less than the cost to rent, this field will display the estimated savings. Otherwise if buying will cost you more than renting, this field will display n/a.

If you would like to save the current entries to the secure online database, tap or click on the Data tab, select "New Data Record", give the data record a name, then tap or click the Save button. To save changes to previously saved entries, simply tap the Save button. Please select and "Clear" any data records you no longer need.

Help and Tools

Tips

The monthly mortgage payment is only the tip of the home buying cost iceberg.

Double Your Pleasure? Then Double Your Costs!

The problem with most rent versus buy calculators is that they fail to account for the additional costs that come from moving from a 1,200 square foot apartment with no costs of ownership, into a 2,500 square foot home that comes with all the costs of owning and maintaining a home.

When you move into a home that is double the size of your apartment, and that comes with costs of ownership, here are some costs that you need to be aware of that mortgage brokers and real estate agents probably won't be alerting you to:

  • You will now have to pay the utility bill for heating and cooling twice the square-footage.
  • You have twice the space to furnish and decorate.
  • You will now have a yard and driveway to maintain.
  • You will now be paying property taxes on the value of the entire property.
  • You will now have to get homeowner insurance to protect you from loss, versus the landlord having to purchase the insurance.
  • You will now have to repair, maintain, and replace all fixtures, appliances, heating-cooling equipment, landscaping equipment, floor coverings, roof coverings, siding, pavement, and so on, as they all break, wear-out or become obsolete. And if you fail to properly maintain your property, don't plan on the value appreciating as much as the real estate agent is boasting it will.

If you take your time when entering data into the rent vs. buy mortgage calculator, you will likely be shocked as to just how much these costs of ownership can add up to over time.

Don't Be an Ostrich

In my experience, the reason most people are forced to take out second mortgages on their homes is that they had their head buried in the sand with regard to homeownership costs.

In other words, they relied on so-called "experts" to tell them whether or not they could afford the home they bought.

Unfortunately, these home buyers failed to recognize that those "experts" stood to gain from getting them to ignore the costs of homeownership.

The choice is yours, you can choose to ignore the costs of homeownership when contemplating a home purchase, or you can take painstaking steps to accurately forecast and budget for them.

If you fail to accurately forecast and budget for them, then you will likely need to take out a second mortgage when they show up "unexpectedly."

On the other hand, if you do take the time to accurately forecast and budget for costs of ownership, then you will either end up in a smaller home than you had hoped for, or you may be forced to continue to rent.

Adjust Calculator Width:

Move the slider to left and right to adjust the calculator width. Note that the Help and Tools panel will be hidden when the calculator is too wide to fit both on the screen. Moving the slider to the left will bring the instructions and tools panel back into view.

Also note that some calculators will reformat to accommodate the screen size as you make the calculator wider or narrower. If the calculator is narrow, columns of entry rows will be converted to a vertical entry form, whereas a wider calculator will display columns of entry rows, and the entry fields will be smaller in size ... since they will not need to be "thumb friendly".

Show/Hide Popup Keypads:

Select Show or Hide to show or hide the popup keypad icons located next to numeric entry fields. These are generally only needed for mobile devices that don't have decimal points in their numeric keypads. So if you are on a desktop, you may find the calculator to be more user-friendly and less cluttered without them.

Stick/Unstick Tools:

Select Stick or Unstick to stick or unstick the help and tools panel. Selecting "Stick" will keep the panel in view while scrolling the calculator vertically. If you find that annoying, select "Unstick" to keep the panel in a stationary position.

If the tools panel becomes "Unstuck" on its own, try clicking "Unstick" and then "Stick" to re-stick the panel.