Rent vs Buy Calculator
Should you buy a home or keep renting and invest the difference? This compares your net worth on each path - counting the one thing most calculators ignore: the down payment you could have invested instead.
Both paths spend the same monthly housing budget; whoever pays less invests the difference at your investment return, and the renter also invests the down payment and closing costs. Nominal terms, fixed-rate mortgage, constant assumptions. A model, not financial advice.
Frequently asked
Is it better to rent or buy?
There is no universal answer - it depends on how long you stay, local prices and rents, and what else you could do with the money. Buying builds equity but locks up a large down payment and adds tax, maintenance and transaction costs. Renting keeps you flexible and frees that capital to invest. The honest way to decide is to compare the net worth of each path over your actual time horizon, which is what this calculator does.
What is the opportunity cost this calculator captures?
The single most overlooked factor: your down payment and closing costs are not free - invested elsewhere, they would grow. So the fair comparison is not "rent money is wasted" versus "mortgage builds equity". It is buying (equity minus all ownership costs) versus renting (a smaller monthly bill plus that down payment and every monthly saving invested at a market return). When investment returns are high and appreciation is modest, renting and investing can genuinely win.
Why does how long I stay matter so much?
Because buying front-loads large one-off costs: typically 2-5% to purchase and 5-7% to sell. Spread over two or three years those costs are crushing; spread over fifteen they are trivial. That is why the tool shows a break-even year - the point at which buying overtakes renting. Stay past it and buying tends to win; sell before it and renting usually would have left you richer.
What costs of owning do people forget?
Beyond the mortgage: property tax, maintenance (roughly 1% of the home value a year), building and contents insurance, and any HOA or service charges. Together these can add 2-3% of the home value annually - real money that never builds equity. This calculator includes them all, because leaving them out is what makes buying look artificially cheap.
Should I always buy if I can afford it?
Not necessarily. Affording the payment is different from it being the best financial choice. If you may move within a few years, if prices are stretched relative to rents, or if you would otherwise invest the down payment at a strong return, renting can be both cheaper and more flexible. Run your real numbers and let the break-even year guide you rather than the assumption that buying is always right.
Can Alvest track my home in my net worth?
Yes. Alvest counts your property and mortgage alongside your investments for a true, real-time net-worth picture - and helps you weigh housing against investing. You can start free.