THE NUMORIX GUIDE
How to use the Rent vs Buy Calculator
Last reviewed September 14, 2026
What this calculator does
The comparison calculates monthly mortgage, tax, insurance, and maintenance cost for buying.
Formula and method
The comparison calculates monthly mortgage, tax, insurance, and maintenance cost for buying. Each year it grows home value, reduces mortgage balance with a simplified annual principal calculation, and invests the renter's down payment plus buying closing costs at the entered monthly return while paying monthly rent that grows annually. It then compares buy equity and rent investment wealth through buyNetCost and rentNetCost.
Variables and inputs
Enter home price, down payment, mortgage rate and term, monthly rent, annual rent increase, property-tax rate, annual insurance, maintenance rate, home appreciation, investment return, comparison years, and buy/sell closing costs. Dollar fields are dollars; rates are annual percentages; horizon is years.
Worked example
With a $400,000 home and $80,000 down, the loan is $320,000. At 6.5% for 30 years, principal and interest is about $2,023 per month. Tax at 1.2% is 400,000 x 0.012 / 12 = $400 monthly, insurance is 1,500 / 12 = $125, and maintenance at 1% is 400,000 x 0.01 / 12 = $333.33, so modeled monthly buy cost is about $2,881.33.
How to interpret the result
The recommendation is whichever modeled net cost is lower after the selected horizon. Horizon matters because buying has upfront and sale costs while renting leaves the initial cash invested in the route's scenario. Changing appreciation or investment return can reverse the comparison.
Common mistakes to avoid
Use annual rates for property tax, maintenance, rent growth, appreciation, and investment return. Do not compare only rent with mortgage principal and interest; include tax, insurance, maintenance, transaction costs, and the opportunity cost of the down payment.
Assumptions and limitations
The engine uses a simplified annual mortgage-balance reduction, treats the rent investment and buying cash flows with fixed conventions, and does not include income tax deductions, repairs beyond the rate, HOA, insurance changes, rent vacancies, or actual investment volatility. Its result is not a universal buy or rent recommendation.