Tools / Rent vs. Buy
Rent vs. Buy Calculator
Compare the total financial impact of renting vs. buying over your planned time horizon.
$350000
10%
7%
$2200
3%
3.5%
7%
10 yrs
⚡
Leverage Effect Explained
With a 10% down payment, your $35,000 controls a $350,000 property. At 3.5% annual appreciation, the home gains $12,250in Year 1 — entirely on your initial cash investment. That's a 35% return on your cash from appreciation alone (before costs), versus 3.5% if you owned the property outright. Leverage multiplies your return by 0.4×.
Your Cash In
$35,000
10% down
Yr 1 Appreciation Gain
$12,250
on full $350,000
Return on Your Cash
35%
vs 3.5% unleveraged
Leverage Multiplier
0.4×
amplification on cash
After 10 years: Renting & Investing comes out ahead by $318,835
Property Value (Yr 10)
$493,710
Total Equity Built
$223,401
Leveraged Cash Return
538%
appreciation + paydown on cash
Remaining Loan Balance
$270,309
How leverage works here: "Buy Net Worth Gain" measures your net equity above your initial investment minus total ongoing costs paid (mortgage, taxes, insurance, maintenance). The renter invests the equivalent down payment + closing costs at the specified investment return, plus any monthly savings when buying costs more than renting. Leverage amplifies appreciation returns on your cash, but does NOT reduce the real monthly costs of homeownership — those always count against the buy position.