What's included
- Renting: monthly rent (inflating each year). Renter's insurance is not separately modeled. No equity, no maintenance.
- Buying: mortgage payment (P&I), property tax (~1.1%/yr), insurance, maintenance (~1%/yr), one-time closing costs (~3%) — minus the equity you build and home appreciation.
- Mortgage interest and property tax deductions are not modeled (they're worth less post-standard-deduction anyway).
Reading the result
Buying almost always costs more per month at first — the question is whether equity + appreciation catch up within your horizon. The classic guidance: if you'll move within ~5 years, renting usually wins; if you'll stay 10+, buying typically pays off. But the real answer depends on these exact numbers — that's what this calculator is for.
Hidden costs to remember
- Maintenance is real: figure ~1% of home value per year (a $20k roof eventually comes due).
- Opportunity cost of your down payment — the calculator shows it as money tied up.
- Rent control, HOA fees, special assessments — adjust numbers to your situation.