$2,000/mo rent vs $250,000 home
Here’s the 10-year cost comparison for $2,000/mo rent vs $250,000 home, at 20% down and 6.5% mortgage rate.
Different numbers? Use the full rent vs. buy calculator above.
About this rent vs. buy calculator
This calculator compares the total cost of renting versus buying a home over a set number of years, using a simplified model built around the most significant costs on each side. For buying, it calculates a standard mortgage payment on your loan amount (home price minus down payment) at your entered interest rate, then adds an estimated 1.5% of the home's price per year for property tax, homeowners insurance, and maintenance — a commonly used rule-of-thumb combined rate for these ongoing ownership costs.
To make the comparison fair, the calculator also credits you for the equity you build while owning: your down payment plus the portion of every mortgage payment that goes toward principal (as opposed to interest) over the comparison period. That equity is subtracted from your total ownership costs to arrive at a "net cost of buying" — an estimate of money spent that you don't get back, similar to how rent is money you don't get back.
For renting, the calculator totals your rent payments over the same period, optionally increasing your rent each year by an assumed annual percentage to reflect typical rent inflation — 3% per year by default, though you can adjust it.
Importantly, this model deliberately ignores home price appreciation, which is one of the biggest and most unpredictable factors in the real rent-versus-buy decision — home values can rise, fall, or stay flat over any given period, and past performance in any specific area is no guarantee of future results. It also ignores closing costs, mortgage points, private mortgage insurance (PMI), the tax deductibility of mortgage interest in some jurisdictions, and the opportunity cost of investing a down payment elsewhere instead of buying. All of these can meaningfully shift the real-world answer in either direction.
The results shown here are simplified estimates for informational purposes only and are not financial advice. The rent-versus-buy decision depends heavily on your local housing market, how long you plan to stay, your investment alternatives, and your personal financial situation — consult a financial advisor or real estate professional for guidance specific to you.
Rent vs. buy questions
How the total cost of renting and buying is calculated.
How does this calculator compare renting and buying?
It totals your rent payments (with an optional annual increase) over your comparison period, and separately totals your mortgage payments plus estimated property tax, insurance, and maintenance for buying — then subtracts the equity you'd build from buying to get a net cost for each option.
Does this calculator include home price appreciation?
No. Home value changes are one of the most unpredictable parts of the rent-versus-buy decision, so this calculator intentionally leaves them out and focuses on the more predictable cash costs of each option.
What is 'equity built' and why does it matter?
Equity built is your down payment plus the portion of your mortgage payments that reduce your loan principal (rather than paying interest). It's money you get back if you sell the home, so it's subtracted from your total ownership cost to make the comparison fair against rent, which you never get back.
How is the estimated cost of property tax, insurance, and maintenance calculated?
This calculator uses a commonly cited rule-of-thumb estimate of 1.5% of the home's price per year to cover property tax, homeowners insurance, and routine maintenance combined. Actual costs vary significantly by location and property.
Does this include closing costs or PMI?
No. Closing costs, private mortgage insurance (PMI) on low down payments, and mortgage points are not included, which means actual buying costs could be somewhat higher than shown here, especially in the first year.
Why does the annual rent increase matter?
Rent typically rises over time, while a fixed-rate mortgage payment stays the same for the life of the loan. Over a long comparison period, even a modest annual rent increase can meaningfully raise the total cost of renting relative to buying.
Is buying always cheaper than renting long-term?
Not necessarily — it depends heavily on your local home prices and rents, mortgage rate, how long you stay, and home price trends in your area. This calculator gives a starting estimate based on the numbers you enter, not a universal rule.
Is this financial or real estate advice?
No. This calculator provides simplified estimates for informational purposes only and is not financial or real estate advice. Consult a financial advisor or real estate professional for guidance specific to your situation.