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Buy vs rent calculator

By Gliora Team

Buy or rent a home?

Buying
Renting & investing

Buying comes out ahead by $66,295.24 over the period.

Net cost of buying $54,911.51
Net cost of renting $121,206.75

Simplified model: the "net cost" of buying subtracts your final net worth (home value minus remaining debt) from what you paid out; the renting one subtracts what investing the down payment would have earned. It doesn't include taxes or every possible expense. For guidance only, not financial advice.

Year 10 · buying saves $52,800
HOME
Net cost of buying Net cost of renting A $400,000 home with $80,000 down, a 6.5% 30-year mortgage, 4% closing costs and $7,000 a year in property tax, insurance and upkeep, versus $1,900 a month in rent rising 3% a year while the down payment earns 7%. Each mark on the gauge is $15,000. Buying starts with the closing costs up front, but every payment pays down principal and the home appreciates 3.5% a year. From year 5, the buying tank sits below the renting one. From year 27 its net cost turns negative: the home is worth more than you've put in and the tank runs dry. Taxes on the sale and deductions are not included.

This buy vs rent calculator compares the net cost of buying a home against renting an equivalent one and investing the money you’d otherwise put toward a down payment and buying costs.

A guaranteed asset vs. an invested alternative

Buying ties up your down payment and buying costs in a home whose value may rise or fall, while your mortgage payments build equity over time. Renting keeps that same money liquid and invested instead, growing (or shrinking) at your expected investment return while you pay rent that typically increases each year.

Example

With a $250,000 home, a $50,000 down payment, a 3% mortgage rate over 30 years, 12% buying costs, $1,000 monthly rent rising 2% a year, and a 5% expected investment return over a 15-year horizon: buying comes out ahead by roughly $66,300 over the period.

For guidance only, not financial advice — it doesn’t include taxes or every possible expense.

FAQ

How is the "net cost" of buying calculated?
It's everything you pay out — down payment, buying costs, mortgage payments and ongoing home costs — minus your net worth at the end of the period (the home's value minus any remaining mortgage debt).
How is the "net cost" of renting calculated?
It's the total rent paid over the period minus what you'd have earned by investing the down payment and buying costs instead, at your expected investment return.
Does this model include taxes or transaction costs on selling?
No — it's a simplified comparison. It doesn't account for taxes on either side, selling costs when exiting a property, or the non-financial value of owning versus the flexibility of renting.
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