Mortgage vs rent,
the real math.
Buying isn't always better than renting. This calculator includes the opportunity costopportunity costWhat you silently give up when you pick one option over another. Spending $100 today on dinner means giving up whatever that $100 could have grown into if you had invested it instead.Full definition of your down payment, maintenance, property tax, and the full 5% Rule. The factors most calculators quietly ignore.
If comparable rent is below this, renting is likely better financially. Based on ~5% of home value annually for the three unrecoverable costsunrecoverable costsThe costs of owning a home that produce no residual value: property tax, maintenance, and the opportunity cost of capital tied up in the home. The 5% rule uses these to compare renting vs buying on equal footing. of ownership.
| Horizon | Buy net | Rent+invest net | Winner |
|---|
This calculator focuses on the financial decision. Homeownership has real non-financial benefits (stability, customization, community) that are not quantifiable here.
What this tool assumes
- Monthly mortgage payment uses the standard P&I amortizationamortizationThe process of paying off a loan through regular payments that cover both principal and interest.Full definition formula.
- Property tax, insurance, HOA, and maintenance inflate at the same rate as home value.
- Opportunity cost uses the investment-return rate you supply.
- Closing costs and selling costs are not modeled.
- Mortgage interest deduction depends on your filing status and itemization; not modeled.
Not financial advice. Based on Ben Felix's 5% rule for unrecoverable costs.
HOW THIS IS CALCULATED
This tool runs entirely in your browser — no data is sent to any server. All formulas use standard financial math. Verify the methodology or inspect the source code in your browser's dev tools.