Rent vs Buy Calculator

The "5% Rule" of Renting

A common rule of thumb is that unrecoverable costs of homeownership (Property Tax, Maintenance, Cost of Capital/Interest) match renting if annual rent is about 5% of the home price.

However, this calculator goes deeper by factoring in:

• Opportunity Cost: What if the renter takes their down payment and monthly savings and puts them in the S&P 500?
• Appreciation: How fast will the home value grow?
• Inflation: Rents usually rise every year, while a fixed-rate mortgage stays flat.

Key Takeaways