Rent vs Buy Calculator
Compare renting and buying a home as two net worths over the years you plan to stay: down payment, closing costs, maintenance, appreciation and the return the renter earns on the cash, every assumption an input. Singapore mode adds BSD, ABSD and SSD. Free.
Rent vs Buy Calculator
Two households start with the same cash. One buys: the cash goes on the down payment and closing costs, then the mortgage, tax, insurance and upkeep. The other rents and invests that cash — and in any month one of them pays less for housing, that one invests the difference. The tool tracks both net worths year by year, after the costs of selling. Every assumption below is an input; change the ones you disagree with.
Not modelled: income tax or capital-gains tax on either side, a change in the mortgage rate, PMI unless you add it to the monthly costs, and the costs of moving. A year shaded in the table is the first in which buying is not behind.
How to Use the Rent vs Buy Calculator
Match the rental to the home
Use the rent of an EQUIVALENT property (same size, neighbourhood, condition). The biggest misuse is comparing a 2-bed apartment to a 4-bed house. Pull rent comparisons for the actual home you would buy, as if it were let.
Set how long you will stay
Buying front-loads its costs — closing costs on the way in, selling costs (and in Singapore, possibly seller's stamp duty) on the way out — so a short stay rarely recovers them. The table shows every year, and the shaded row is the first year buying is not behind. On the defaults renting leads for the first 10 years and buying first comes out ahead in year 11.
Be honest about appreciation and returns
FHFA's purchase-only house price index for the US rose from 100 in January 1991 to 443.52 in July 2026 — about 4.3% a year — while consumer prices (CPI-U) rose about 2.6% a year. Your market will differ. The investment return matters as much: it is what the renter's cash earns, so set it to what you would really hold, after fees.
Read the two net worths, not a single "cost"
The comparison that counts is what each household owns at the end: the buyer's home equity after selling costs, plus anything invested; the renter's portfolio. The price-to-rent ratio is shown as a quick screen, but it ignores rates, costs and how long you stay — the year table does not.
Rent vs Buy — The Math Most People Get Wrong
What the Naive Comparison Misses
The classic "mortgage payment vs rent" comparison distorts the decision. Mortgage payments are split between interest (a cost) and principal (savings you get back when you sell). Treating the whole payment as cost is as wrong as treating rent as if it bought you nothing. The honest comparison also counts what renting lets you do with the cash a purchase would swallow — the down payment and closing costs — and with any month in which renting is cheaper. That is the opportunity cost, and it is why this tool lets the renter invest: without it, buying wins almost by construction.
The other side of the ledger is the costs only an owner pays: property tax, insurance, maintenance, association fees, the costs of buying and of selling. Each is an input here because none of them is a constant. A rule of thumb such as "maintenance is 1% of value a year" is a starting point, not a measurement — older homes and wet climates cost more.
Why the answer changes with the years you stay
On the defaults — a USD 450,000 home with 20% down at 6.5%, rent of USD 2,400, 3.5% a year for both prices and rents and 7% on invested cash — renting is ahead by USD 40,440 after one year and by USD 21,872 after seven, and buying first comes out ahead in year 11. The early gap is mostly transaction costs: USD 10,800 to buy and 7% of the sale price to sell, before any appreciation has accumulated to pay for them. Change appreciation or the investment return by a point and the crossover moves by years, which is the honest lesson: the decision is sensitive to the two assumptions nobody can know in advance.
The rent-or-buy answer is rarely obvious; it turns on how long you stay and on two guesses — how fast the home's price grows and what the cash would have earned instead.
Non-Financial Factors That Often Trump the Math
The pure-math comparison treats housing as an investment. But housing is also: schools you can't change without moving, the ability to customise, flexibility, the security of ownership or the freedom of renting, proximity to family. If you may relocate for work, the short-stay rows of the table matter most. If you are settling for a decade with children in school, the long rows do. The calculator surfaces the financial answer; you supply the weighting.
Singapore — stamp duties change the arithmetic
Switch the rules to Singapore and the tool adds the duties IRAS charges, each on the higher of the price and the market value. Buyer's stamp duty applies to every residential purchase from 15 February 2023 at 1% on the first S$180,000, 2% on the next S$180,000, 3% on the next S$640,000, 4% on the next S$500,000, 5% on the next S$1,500,000 and 6% on the rest — S$44,600 on a S$1,500,000 home.
Additional buyer's stamp duty, from 27 April 2023, depends on who is buying and how many homes they already own: nothing for a citizen's first home, 20% on a second and 30% on a third; 5%, 30% and 35% for a permanent resident; 60% for a foreigner. The renter keeps that money invested, which is why ABSD usually decides the comparison on its own.
Seller's stamp duty applies if you sell within four years of buying: for homes bought on or after 4 July 2025 it is 16% of the sale price up to one year, 12% up to two, 8% up to three and 4% up to four. The tool charges it at each year-end of the table, counting from today's date — on a S$1,545,000 sale after one year that is S$247,200.
Two more local differences. Property tax is charged on the property's Annual Value — IRAS multiplies the AV by the rate that applies to you — not on the price, so work out your bill as a percentage of the price and enter that. There is no mortgage-interest deduction for a home you live in, so the deduction field is hidden. And a bank will lend at most 75% of the price on a first housing loan under MAS's loan-to-value limit; the tool flags a down payment below 25%.
Transaction costs, the renter's invested cash and the year buying catches up
On this page's defaults, renting is ahead after every year to the tenth; buying first comes out ahead in year 11.
Price-to-rent ratio = home price ÷ a year's rent. A USD 450,000 home renting for USD 2,400 a month scores 15.6.
The ratio is a screen, not a verdict: it ignores interest rates, costs, taxes and how long you stay, which is why the tool shows net worths instead.
Freddie Mac says to expect closing costs of 2%–5% of the loan amount when you buy; the default here is 3%.
FHFA's US purchase-only house price index rose about 4.3% a year from January 1991 to July 2026; consumer prices (CPI-U) about 2.6%.
The renter's side is not just rent: the cash a purchase swallows stays invested, and so does every month's difference.
Mortgage interest deduction: IRS Publication 936 (2025 returns) allows interest on the first USD 750,000 of mortgage debt — but only if you itemise.
The 2025 standard deduction is USD 31,500 for a married couple filing jointly, and the IRS notes most people take it — so the deduction field starts at 0.
Singapore's seller's stamp duty is 16% of the price if a home bought since 4 July 2025 is sold within a year (IRAS).
US homeownership rate: 65.0% in the second quarter of 2026 (Census Housing Vacancy Survey) — down from 69.2% in 2004 and up from 62.9% in 2016.
Frequently Asked Questions
- When you stay long enough for appreciation and paid-down principal to outrun the costs of buying and selling and what the cash would have earned invested. There is no universal number of years: on this page's defaults buying first comes out ahead in year 11, and a point more appreciation, a point less return on investments, or a cheaper purchase brings that year forward. The year table shows the crossover for your own numbers.
- Home price divided by a year's rent. A USD 400K home renting for USD 2K a month has a ratio of 16.7 (400K ÷ 24K). A higher ratio means rent is cheap relative to price, which leans toward renting — but the ratio ignores interest rates, costs and how long you stay, so treat it as a screen and read the net worths for the answer.
- It is what the money tied up in a home would have earned elsewhere. A buyer puts the down payment and closing costs into the purchase; a renter can invest them, and also invests the difference in any month renting costs less. Leave this out and buying looks better than it is; set the return too high and renting does. The default 7% is an assumption about a long-run investment portfolio, not a promise — enter what you would actually hold.
- Only if you itemise. The 2025 standard deduction is USD 31,500 for a married couple filing jointly, and the IRS notes that most people take the standard deduction. If your itemised deductions would beat it, IRS Publication 936 lets you deduct interest on the first USD 750,000 of mortgage debt (USD 375,000 married filing separately). The field starts at 0; entering your marginal rate counts all of the interest as deductible, which overstates the benefit unless every dollar of it falls above the standard deduction.
- That changes the calculation. Living in one unit and letting the others, or letting a room, lowers your housing cost — enter the rent you would receive as a reduction of the monthly costs only if it is reliable. Converting to a pure rental after you move needs the property to work as a rental at the rent of that day, with its own taxes and costs; model that separately with a rental cash-flow calculator.
- Nobody can time rates reliably, and prices can move while you wait. What you can do is run the calculator at today's rate and at the rate you are hoping for, with the price change you think would come with it, and see whether the difference is worth the rent paid in the meantime. A lower rate later can also be captured by refinancing, at a cost — our refinance calculator shows when that pays.
- The calculator only handles money. Buying gives you stability, the freedom to change the home, schools you can plan around, and no landlord. Renting gives you mobility, no maintenance responsibility and no exposure to a fall in the home's price. When the net worths are close, those considerations should decide; when they are far apart, know what the choice costs you.
- Owning a home whose costs — mortgage, tax, insurance, maintenance — leave too little for savings and emergencies. A lender's approval is a maximum, not a recommendation. Before you buy, compare the first month's owning cost the tool shows with what you can comfortably pay, and keep an emergency fund outside the house: equity is slow and costly to reach.
- A lot, between US states and counties and between countries — so use your own bill rather than a national average. In the US, divide a recent bill for the home by its price. In Singapore, IRAS charges property tax on the Annual Value, not the price, at the rate that applies to you; divide the bill by the price and enter that percentage. A 1% vs 2% difference on a USD 500K home is USD 5,000 a year.
- It can. Lenders may want a larger down payment or charge a higher rate without a US credit history, and the mortgage interest deduction helps only if you have US taxable income to deduct it from. On a sale, the IRS requires the buyer to withhold 15% of the amount realised from a foreign seller under FIRPTA, which is a prepayment of tax rather than an extra cost but ties up cash. Enter your own rate, down payment and costs.
Method & sources
How it computes
Monthly net-worth comparison in whole cents. Buyer pays down payment + closing costs (+ IRAS BSD/ABSD in SG mode); the renter invests that cash. Each month: instalment + tax + maintenance (% of start-of-year value) + insurance + other − interest × deduction rate, vs rent rising yearly; both portfolios compound monthly and the cheaper side invests the gap. Buyer = value − selling costs − SSD − balance + portfolio (MortgageKernel.rentVsBuy).
What this tool implements
- A net-worth comparison, not a "total cost": both households start with the same cash; the buyer spends it at purchase, the renter invests it, and in every month the household whose housing cost less invests the difference at the same return (compounded monthly). The buyer's net worth at each year-end is the home's value less selling costs, seller's stamp duty and the loan still owed, plus anything they invested.
- Every assumption is an input and is stated beside the result: closing costs (% of the loan; Freddie Mac says 2%–5% of the loan amount when buying), selling costs, property tax and maintenance as % of value, insurance, other monthly costs, appreciation (may be negative), rent growth, investment return, and the US interest deduction (0 by default — the IRS notes most people take the standard deduction, USD 31,500 for a married couple filing jointly in 2025). Not modelled: income or capital-gains tax, a change in the mortgage rate, PMI unless added to other costs.
- Singapore mode (SgPropertyKernel): IRAS buyer's stamp duty (1%/2%/3%/4%/5%/6% bands from 15 Feb 2023) and additional buyer's stamp duty (from 27 Apr 2023: citizen 0/20/30%, PR 5/30/35%, foreigner 60%) on the price; seller's stamp duty on the year-end value for homes bought on or after 4 Jul 2025 (16/12/8/4% up to one/two/three/four years, read off calendar anniversaries of today's purchase date); no interest deduction; a down payment under 25% is flagged against MAS's 75% loan-to-value limit for a first housing loan.
- Corrected 2026-10-17: the renter invested only the down payment — the monthly saving was left out; buyer closing costs were not modelled; the sale cost was fixed at 7%; all interest was assumed deductible at 24%; removed as unsourced — the price-to-rent verdict bands, "buy almost always wins past 7–10 years", the 28/36 rule, "most retroactive analyses"; removed as unverifiable in a raw primary source — the New York Times attribution, Tax Foundation state rates, the SALT cap figures, the Proposition 13 cap; the Census homeownership rate updated to 65.0% (Q2 2026); FHFA's "roughly 4% a year since 1991" confirmed at 4.3% against CPI-U's 2.6%. The SSD band for a sale on an anniversary across 29 February was a year early in sg-property-kernel.js (a 365.25-day year) and is now read off calendar anniversaries.
Sources
- Inland Revenue Authority of Singapore. Buyer's Stamp Duty (BSD) — rates on or after 15 Feb 2023. https://www.iras.gov.sg/taxes/stamp-duty/for-property/buying-or-a…)
- Inland Revenue Authority of Singapore. Additional Buyer's Stamp Duty (ABSD) — rates on or after 27 Apr 2023. https://www.iras.gov.sg/taxes/stamp-duty/for-property/buying-or-a…)
- Inland Revenue Authority of Singapore. Seller's Stamp Duty (SSD) for residential property — rates on and after 4 Jul 2025. https://www.iras.gov.sg/taxes/stamp-duty/for-property/selling-or-…)-for-residential-property
- Inland Revenue Authority of Singapore. Property tax rates (property tax = Annual Value × rate). https://www.iras.gov.sg/taxes/property-tax/property-owners/proper…
- Freddie Mac, My Home. Closing your loan when buying (closing costs 2%–5% of the loan amount). https://myhome.freddiemac.com/buying/closing-your-loan-when-buying
- Federal Housing Finance Agency. House Price Index, purchase-only monthly history (USA, seasonally adjusted: 100 in Jan 1991, 443.52 in Jul 2026). https://www.fhfa.gov/hpi/download/monthly/hpi_po_monthly_hist.csv
- US Bureau of Labor Statistics. CPI-U, all items, seasonally adjusted (FRED series CPIAUCSL: 134.7 in Jan 1991, 332.813 in Jul 2026). https://fred.stlouisfed.org/series/CPIAUCSL
- US Census Bureau. Housing Vacancies and Homeownership — Q2 2026 release and Historical Table 14. https://www.census.gov/housing/hvs/current/index.html
What can make this go out of date
- None at runtime beyond the page's own kernels; nothing the reader types is sent anywhere. Singapore mode reads today's Singapore business day (RecaBusinessDay) to pick the SSD schedule.
Abridged — the full review record for this tool runs longer than the list above.
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