Rent vs Buy Calculator

Live rates · USA · May 3, 2026
Source: Freddie Mac · updated weekly
Income
Annual gross income
$/yr
Co-borrower income
$/yr
Monthly debts
Car, student, credit card
$/mo
Mortgage
Down payment
$
Interest rate
%
Amortization
Housing costs
Property tax rate
%/yr
Monthly HOA / condo fee
$/mo
Max home price
—
based on qualifying ratios
Monthly payment
—
on max purchase price
Qualifying ratios
Front-end ratio
Max 28%
—
Back-end ratio
Max 36%
—
Monthly budget breakdown
Enter your income above to calculate your maximum home price.
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Home price
$
Down payment
$
20.0% of price
Annual interest rate
%
Amortization
Payment frequency
Extra monthly payment
$/mo
Monthly payment
—
Loan amount
—
Total interest
—
Total cost
—
Payment breakdown
Principal—
Interest—
Balance & cumulative interest
Balance
Cum. interest
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Current loan
Remaining balance
$
Current rate
%
Remaining term
yrs
New loan
New rate
%
New term
Closing costs
$
Current loan
—
per month
Remaining interest: — Total remaining: —
After refinancing
—
per month
Total interest: — Total + closing: —
Cumulative interest paid (+ closing costs on new loan)
Current loan
New loan
Buying
Home price
$
Down payment
$
20.0% of price
Mortgage rate
%
Amortization
Property tax rate
%/yr
Maintenance + insurance
%/yr
Renting
Monthly rent
$/mo
Annual rent increase
%/yr
Returns & horizon
Home appreciation
%/yr
Renter investment return
%/yr
Analysis period
Monthly housing cost
Owning
—
Renting
—
Net worth at 20 years
Buying
—
Home equity + invested savings
Renting + investing
—
Down pmt + invested savings
Net worth over time
Buying
Renting + investing
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About the Rent vs Buy Calculator

The rent vs buy decision is not answered by comparing monthly costs — it requires modelling the long-term net worth of each path. This calculator runs both scenarios simultaneously over your chosen horizon (5 to 30 years), accounting for equity accumulation, property appreciation, investment returns on unspent capital, and rent escalation over time.

When you buy, you build equity through two mechanisms: paying down the principal each month and through property appreciation. The calculator models your home's value growing at your specified annual appreciation rate, while the outstanding mortgage balance decreases according to the correct amortization schedule. Your net worth as a buyer is the appreciated home value minus the remaining mortgage balance.

When you rent, the down payment you did not spend stays invested and compounds. If monthly renting is cheaper than owning, that difference is also invested each month. Long-term equity index investors in Canada and the US have historically averaged approximately 7–8% annual returns, though past performance does not guarantee future results.

The crossover year — when the buyer's net worth first overtakes the renter's — depends on the spread between home appreciation and investment returns. In markets where home values appreciate faster than a diversified portfolio, buying tends to win over longer horizons. The honest answer depends on your specific numbers, not a general rule of thumb.

Key terms

Frequently asked questions

Is it always better to buy than rent in Canada?
No. Whether buying beats renting depends on the specific market, your down payment, the price-to-rent ratio, how long you stay in the home, and what return you could earn by investing instead. In high-price markets like Vancouver and Toronto, the monthly cost of ownership significantly exceeds rent — meaning a renter who invests the difference can accumulate substantial wealth. This calculator models both scenarios with your actual numbers to find the crossover point.
How does the calculator account for CMHC insurance?
When Canada is selected and your down payment is below 20%, the CMHC premium (2.8%–4.0% of the loan) is automatically added to the mortgage balance. This increases the monthly mortgage payment and slows equity accumulation compared to an uninsured mortgage. The buyer's net worth calculation uses the correct higher loan balance, giving you an accurate picture of CMHC's impact on the long-term comparison.
What investment return should I assume for the renter scenario?
The TSX Composite Index has returned approximately 7–9% annually over 20-year periods. The S&P 500 has averaged approximately 10% annually over long periods before inflation. A conservative, broadly diversified Canadian investor might use 6–7%; a more aggressive US equity investor might use 8–9%. The default of 7% is a reasonable middle ground. The sensitivity between 6% and 9% can shift the crossover year by 3–7 years.
Should I include property tax and maintenance in the buying costs?
Yes — this calculator includes both. The property tax rate field (default 1.1% of home value annually) and the maintenance + insurance field (default 1.5% of home value annually, a widely cited industry estimate) are both included in the monthly ownership cost. These are often overlooked in rent vs buy comparisons but typically add $500–$2,000/month to the true cost of owning a $700,000 home.
How do I know what home appreciation rate to use?
Canadian national average home price appreciation has been approximately 6–7% annually over the past 20 years, but varies dramatically by market. The CREA (Canadian Real Estate Association) publishes annual statistics by city. US national appreciation has averaged approximately 3–4% annually over long periods. For planning purposes, using a conservative 2–3% assumption tests whether buying makes sense even in a flat market — running the calculation at both 2% and 6% shows the full range of outcomes.

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