Rent vs Buy

Rent vs Buy is a free financial comparison game that calculates whether renting or buying a home wins over a ten-year horizon. You adjust variables like purchase price, down payment, mortgage rate, property tax, appreciation, and investment returns, and the game factors in closing costs, maintenance, and opportunity cost. That holistic comparison matters because the rent-versus-buy decision is one of the largest financial choices most people will ever make, and the conventional wisdom that renting is throwing money away is often wrong.

What the Calculator Shows You

You adjust key variables — monthly rent, home price, down payment, mortgage interest rate, property tax, home appreciation, and investment return rate. The game then calculates which option wins financially over a ten-year horizon. It factors in closing costs, maintenance, property taxes, and the opportunity cost of investing your down payment instead.

The result is a side-by-side comparison that often surprises first-time players. A low interest rate makes buying attractive, but if home prices are inflated relative to rent, you might still lose.

The Skill This Builds: Holistic Financial Comparison

Most rent-versus-buy calculators on the internet show a single number and call it a day. This game forces you to think about how variables interact. High investment returns make renting more attractive because your down payment grows in the market instead of being locked in a house.

A common misconception is that buying is always better because you build equity. But buying a $400,000 home typically costs 3-5% in closing fees upfront and another 6-10% in realtor commissions when you sell — transaction costs that can erase several years of appreciation.

Costs Most People Forget to Include

• Closing costs. Buying costs 3-5% of the purchase price in fees. Selling later costs another 6-10% in commissions. These can erase years of appreciation.
• Maintenance and repairs. Budget 1% of the home's value per year. Over ten years on a $400,000 house, that is $40,000 renters never pay.
• Opportunity cost of the down payment. At a 7% average return, your down payment doubles every ten years — a figure that often rivals or exceeds home appreciation.

Frequently Asked Questions

Is renting really throwing money away? Not necessarily. When you factor in closing costs, maintenance, property taxes, and the opportunity cost of investing your down payment, renting can win financially over a ten-year horizon, especially in expensive markets.

What is the opportunity cost of a down payment? It is the investment return you give up by locking cash in a house. At 7% average return, your down payment doubles roughly every ten years, often rivaling home appreciation.

How much should I budget for home maintenance? A common rule is 1% of the home's value per year. Over ten years on a $400,000 house, that is $40,000 — a significant sum renters never pay.