How the rent-vs-buy models compare cash flow and ending position
This page deliberately separates ongoing cash flow from modeled ending wealth. It does not compress the decision into one “winner” without showing the assumptions that drive it.
The cash-flow model amortizes the mortgage and adds entered taxes, insurance, HOA and maintenance, growing ownership expenses at the rate you enter. Rent grows at its own entered rate. The wealth model starts the renter with the buyer’s down payment plus closing costs as an investable portfolio, applies the entered investment return monthly, and adds the difference between modeled owner and renter cash flows. On the owner side, home value grows at the entered appreciation rate; modeled sale costs and remaining mortgage debt are deducted to estimate net sale equity.
Mortgage payment + taxes + insurance + HOA + maintenanceRecurring ownership costs grow at the entered expense-growth assumption.
Initial buyer cash + invested owner-minus-renter cash-flow differencesUses the entered investment-return assumption.
Modeled property value × (1 − sale-cost %) − remaining mortgageCreates a comparable end-of-horizon owner position.
Use a holding period that reflects how long you might realistically stay.
Enter purchase, rent and recurring ownership costs from the same location and property-quality context.
Run conservative and optimistic assumptions for appreciation, rent growth and investment return.
Compare both cash-flow burden and ending modeled position before interpreting the result.
Best used for
- Testing a 3-, 5- or 10-year rent-vs-buy horizon
- Seeing the effect of high closing or sale costs
- Understanding how appreciation and investment-return assumptions change the result
What this tool does not answer
- The model does not calculate tax consequences, transaction-specific deductions or rental deposits.
- Maintenance is a smooth monthly budget rather than irregular real repairs.
- Future rent, appreciation and investment returns are assumptions, not forecasts.
How to read a sample result
Illustrative example: with a $400,000 purchase, $60,000 down, 6% mortgage, $2,400 starting rent and a 5-year horizon, the model shows first-month owner cash of about $2,838.47 versus $2,400 rent. Under the default growth assumptions, modeled owner net sale equity is about $98,749.57 and the renter portfolio is about $106,717.88—demonstrating how sensitive the outcome is to the entered assumptions.
The methodology below explains how this calculator treats the inputs and assumptions. Replace the sample values with your own planning figures. Results are estimates, not quotes, approvals, disclosures or recommendations.
Inputs and units
Price, down payment, mortgage terms, ownership costs, rent, assumed growth, investment return, holding years and sale costs. All currency entries are U.S. dollars. Percentage fields take a number such as 6 for six percent, not 0.06. Repayment terms marked in months use whole months; horizons marked in years use whole years.
Calculation workspace
Enter your own figures in the calculator above. The starting values are examples only. No personal identifiers are needed to run a scenario.
How to interpret the result
The two workspaces answer different questions. The first examines cash paid; the second examines the modeled ending assets and debt. Do not treat either as a forecast or a personalized buy-or-rent recommendation.
Assumptions and limitations
All growth and return inputs are scenarios, not forecasts. Tax, transaction and maintenance details not entered are excluded. A negative renter portfolio indicates a modeled funding gap.
Review more than one scenario
Run a base case and then change one uncertain input at a time. Compare a shorter holding period, a higher cost or a different repayment term where those inputs are supported. Record which costs have not been entered. A precise-looking number can still rest on uncertain assumptions.
Invalid inputs and error recovery
If an input is missing or outside the calculator’s supported range, the page will ask you to correct it. Use negative values only in fields that explicitly allow them. A calculation error is not a credit decision.
Model documentation
The calculator methodology explains the inputs, assumptions and supported models. Use the result for planning and compare it with the provider’s written terms and applicable disclosures before making a decision.
Choose a product for your calculation
Use these comparisons for planning; final eligibility, pricing and terms are set by the provider.
Program references and comparison sources
CFPB: Loan Estimate explainer — Comparison of covered mortgage disclosures, cash to close, points, lender credits and monthly costs.
CFPB: Understand the different kinds of loans available — Loan structures, terms and repayment risks; not provider-specific eligibility.
Check the linked source for its effective date and applicable scope. A source link is not a lender partnership or an individual offer.