The decision to rent or buy usually comes down to monthly cost. Renting a property that you could buy for $500,000 at $1,800 a month looks expensive—until the mortgage on that $500,000 is $1,500 and the property taxes add another $400.
How it works
This calculator shows the pure monthly cost difference: mortgage payment versus rental payment. A negative number means renting costs more per month. A positive number means buying costs more.
This comparison is incomplete
The monthly difference is just the starting point. A $1,500 mortgage payment stays locked (if fixed-rate) for 30 years. Rent increases 2–3% annually. Over 10 years, the renter’s payment might climb to $2,000 while the owner’s stays $1,500. Meanwhile, the owner is building equity through principal paydown and (hopefully) appreciation. But the owner also pays property tax, insurance, maintenance, and HOA—all of which renters avoid.
What this does not include
This calculator shows only the mortgage-versus-rent line item. Full cost of ownership also includes property tax, insurance, maintenance, HOA, capital expenditures, and opportunities for leverage. Full cost of renting includes lost ability to build equity and exposure to rent increases.
How to use this calculator
- Enter your estimated monthly mortgage payment (principal + interest only; not including tax and insurance).
- Enter the monthly rental cost for the same property or neighbourhood equivalent.
- The result shows the monthly gap and your annual cost difference.
Frequently asked questions
Should I include property tax and insurance in the mortgage comparison?
Yes, but separately. Your true housing cost includes principal, interest, tax, and insurance. The rent you would pay is typically all-inclusive. A “mortgage is cheaper by $300” is only true if property tax and insurance cost less than $300 combined—which is rare.
How long do I need to own to break even with renting?
On pure monthly cash flow, sometimes never—if rent is cheaper and you invest the difference, renting might win financially. But ownership builds equity that renting does not. A general rule is five to seven years before principal paydown and appreciation overcome the higher monthly cost and closing costs of buying. Your timeline and market matter hugely.
What if I expect a big rent increase?
That is a strong argument for buying if rates are favorable and you can afford the down payment. Rent typically rises 2–3% a year, compounding over time. A fixed mortgage payment locks your housing cost for 30 years—a major advantage if rents spike.
