Buy vs. Rent Calculator: The Real-World Approach

Common terms are 30 or 15 years.

Purchase price of the home you're considering buying. The median sale price of a home in the US was $419,200 as of Q4 2024.

Portion of the purchase price you'll pay up front. Typically 5% to 20% of the home price.

Upfront fees and costs associated with finalizing your mortgage, typically 2%-6% of loan amount.

Annual property tax rates typically vary between 0.5% and 2%. Rate is determined by the municipality and based on the home's most recent assessed value.

Annual costs including maintenance (usually 1%-4%), mortgage insurance (usually 0.4%-1.5%), homeowner insurance (usually 0.5%-1%), and HOA fees as percentage of home value.

Expected annual rate at which your home's value will increase. Historical sales prices have increased on average by 3.9% per year since 2000 (CAGR) for US homes.

Broker fees when selling: commission fee paid to real estate agents when selling the home. Typically ranges between 5% and 7% and includes fees split by seller's agent and buyer's agent. Defaulting to 5%, but can vary based on location.

Initial monthly rent for comparable rental home.

Expected yearly percentage rent increase. Historical rents have typically increase 3%-5% annually depending on location.

One-time fee paid to rental broker, if there is one. Many rentals have no broker fee.

Expected annual market return: rather than buy a home, renter puts that money in the stock market. Returns can vary widely. Long-term historical annual growth rate of the S&P: 12% over 50 years, 8% over 20 years, 11% over 10 years.

If going from rental to rental, won't need to sell market investments and gains compound pre-tax. If you plan on buying after renting, select 'Yes' so all investments are sold to pay for next home.