Rent vs Buy Calculator
The math behind the rent-or-buy decision.
Rent vs Buy Calculator
Compare the total cost of renting against owning, including equity gained.
Net Cost of Buying
vs $220,106 in rent
Cumulative Cost: Rent vs Buy
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What This Calculator Does
The Rent vs Buy Calculator puts real numbers behind one of the biggest financial decisions you will make. It compares total cash spent renting against the total cost of owning over your chosen horizon, subtracting the equity you build so the comparison is fair.
How It Works
Renting accumulates monthly rent payments that grow at your rent-increase rate. Buying starts with a down payment, then monthly principal-and-interest, property tax, and insurance; the principal portion becomes equity that offsets the cash outlay.
Example
At R1,600 a month rent growing 3% a year, ten years of renting costs about R220,000. Buying a R350,000 home with 20% down at 6.5% costs more upfront but builds roughly R130,000 in equity, often making ownership the cheaper path long-term.
Reading the Results
Net Cost of Buying
Total cash spent on the purchase and monthly payments minus the equity accumulated. This is the true cost of ownership versus renting.
Buy-Payback Crossover
The point where cumulative buying costs fall below cumulative renting costs. Staying past this point favors buying.
Frequently Asked Questions
Is buying always better than renting?
No. It depends on your horizon, rent growth, mortgage rate, and maintenance. Short horizons and high home prices often favor renting.
Do you include maintenance and repairs?
The model focuses on mortgage, tax, and insurance. Owners should budget roughly 1% of home value a year for upkeep on top.
Does the tool include the down payment?
Yes. The down payment counts as cash spent on the buy side, which is one reason ownership costs more upfront.