Buying a home turns cash into a down payment and, over time, mortgage principal into equity. Renting leaves those resources available to invest, but rent can rise and there is no home equity at the end. The comparison depends on more than a mortgage payment. It depends on time, selling costs, maintenance, taxes, investment returns, and whether the household can comfortably fund the path along the way.
The calculator below follows both choices month by month from the same starting resources. It is not a recommendation or a forecast. It is a way to make the assumptions visible and see which ones matter.
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Buying versus renting calculator
Your entries and saved comparisons stay on this device. They are not sent to ritvikmath or placed in the page URL.
Start with a scenario
Choose two profiles
These fictional starting points are anchored to rounded West Hills-area market and income figures. Pick a home and household profile, then change any field you want.
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Selected horizon
By holding period
| Year | Buy net worth | Rent net worth | Difference |
|---|
Stress tests
What changes the answer?
Each cell is buying minus renting at the selected horizon.
Resolved inputs and data sources
What the model is counting
The two paths begin with the same cash, taxable investments, retirement assets, income, and non-housing spending. The buying path uses cash and, when necessary, taxable investments for the down payment and closing costs. The renting path leaves that money invested. Retirement assets grow in both paths but are never used to pay monthly bills.
Cash flow asks whether income and accessible assets can support each month. A result can look good at year ten while still producing an uncomfortable shortfall in year two, so the calculator reports the minimum monthly surplus and minimum accessible assets separately.
Equity is the home’s modeled value minus the remaining mortgage. Principal payments move wealth from liquid assets into equity; they are not treated as ordinary consumption. Interest, insurance, taxes, HOA costs, maintenance, and selling costs are expenses.
Opportunity cost appears because money used at closing cannot also remain invested. The renting path is credited with investing its available surplus under the same return assumption used for the buyer’s remaining investments.
Holding period matters because closing and selling costs are front-loaded. A long period gives appreciation and principal repayment more time to compound, while a short period can leave too little time to recover transaction costs.
Methodology and limitations
The mortgage uses a standard fixed-rate amortization schedule. Property tax can be entered directly; this public version does not claim to reproduce every assessment rule or local exemption. The California-style annual assessment cap in the private research model is deliberately not silently assumed here. Taxes are simplified effective-rate inputs, not tax advice. The home-sale calculation deducts selling costs, the remaining mortgage, and an optional taxable gain after the user-entered exclusion.
The optional FRED button fetches public observations for the 30-year mortgage benchmark, CPI, national rent inflation, the three-month Treasury yield, and the national house-price index. It displays dates and does not apply anything automatically. A national benchmark is not a lender quote, a local rent forecast, an insurance quote, or a prediction. Manual mode remains fully usable if FRED is unavailable.
The preset profiles are fictional conveniences, not financial classifications or recommendations. Their moderate anchors use a rounded recent West Hills median sale price of about $1.0 million from Redfin, a rounded area median rent of about $4,500 from Realtor.com, and the 2024 ACS median household income of $151,190 for ZIP 91307 reported by Census Reporter. The monthly take-home amounts are illustrative conversions, not tax estimates.
Property information is manual entry only. The page does not contact, scrape, or transmit information to listing websites.
A small math zone
For loan principal $L$, monthly rate $r$, and $n$ payments, the scheduled principal-and-interest payment is
\[M=L\frac{r(1+r)^n}{(1+r)^n-1}.\]At month $t$, the simplified comparison is
\[\Delta_t=NW_{\text{buy},t}-NW_{\text{rent},t}.\]The buying net worth includes cash, investments, retirement assets, and home equity. The renting net worth includes cash, investments, and retirement assets. A second comparison assumes the home is sold at that date:
\[\Delta_t^{\text{sale}}=A_{\text{buy},t}+P_t-C_t-B_t-T_t-NW_{\text{rent},t},\]where $A$ is accessible financial assets, $P$ is the home value, $C$ is selling cost, $B$ is mortgage balance, and $T$ is modeled home-gain tax.
The precision of those equations should not be mistaken for certainty in their inputs. Appreciation, rent growth, investment returns, repairs, taxes, and the eventual selling date are unknown. The sensitivity table is therefore as important as the headline result.