Rent vs Buy Calculator Widget

Add a rent-versus-buy calculator that compares like with like. Readers enter the price, rent, deposit and mortgage, and optionally adjust growth and cost assumptions, and see which option leaves them wealthier and from which year buying pays off.

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<iframe src="https://a2z.tools/embed/w/rent-vs-buy-calculator" title="Rent vs Buy Calculator by A2Z Tools" width="100%" height="1010" style="border:0;width:100%" loading="lazy" allow="clipboard-write"></iframe>

A plain iframe. Works everywhere, including site builders that strip scripts. Adjust height if your content needs more room.

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How it works

The widget runs the same engine as the A2Z Rent vs Buy Calculator. Two households start with the same money. The buyer pays the deposit and buying costs, then the mortgage, property tax and upkeep each month; the renter invests the deposit and buying costs and pays rent. Each month whichever household spends less invests the difference at the investment return. At the end of each year the buyer's net worth is the home value after selling costs, less the mortgage balance, plus investments; the renter's is their portfolio.

Calculation method

  • Mortgage payment = L x i / (1 - (1 + i)^-n), L = price x (1 - deposit %), i = rate / 12, n = term x 12
  • Monthly growth rates are compounding equivalents: g = (1 + annual rate)^(1/12) - 1 for home value and investments
  • Owner cost each month = mortgage payment + value x (property tax % + maintenance %) / 12; owner costs other than the mortgage rise with owner-cost inflation
  • Each month the household with lower costs invests the difference; both portfolios then grow at the investment return
  • Buyer wealth = home value x (1 - selling cost %) - mortgage balance + buyer's portfolio; renter wealth = renter's portfolio
  • Rent rises once a year by the rent-increase rate; results are unrounded until display, where wealth figures show whole currency units and the payment 2 decimals

Worked examples

Rent alone, no other effects

Inputs: Price 300,000 bought outright (100% deposit), rent 1,000 a month, 5 years, every growth rate, cost and return set to 0

Result: Buyer 360,000; renter 300,000; buying comes out ahead by 60,000

The owner has no monthly costs, so the owner banks the 1,000 the renter pays each month: 1,000 x 12 x 5 = 60,000 on top of a house still worth 300,000.

Selling costs alone

Inputs: Same outright purchase with rent 0 and a 6% selling cost

Result: Renting comes out ahead by 18,000

With nothing else moving, the only difference is the 6% of 300,000 lost when the buyer sells - which is why short stays often favour renting.

Limitations

  • Growth rates are held constant for every year; real house prices, rents and markets move unevenly and can fall.
  • Homeowner's insurance, HOA or service charges and renter's insurance are not separate inputs - fold insurance into the maintenance percentage.
  • The mortgage rate is fixed for the whole horizon; remortgaging, rate resets and early repayment charges are not modelled.
  • No tax on investment returns or sale profits and no mortgage-interest relief, which can favour either side depending on the country.

Where publishers use it

  • Estate agents and mortgage brokers explaining the long-term case for buying
  • Personal-finance blogs testing the 'rent is dead money' claim
  • Relocation guides for people moving for a few years
  • Housing-policy and economics articles

Questions

Why does renting sometimes come out ahead?

Buying has large one-off costs (purchase costs and selling costs) and ongoing costs that rent does not have. Over a short stay, or when the investment return beats home-price growth, the renter's invested deposit can grow faster than the buyer's equity.

What does 'buying pays off from' mean?

The first year in which the buyer's net worth is at least the renter's. Before that year, selling up would leave the buyer worse off than having rented.

Which assumptions matter most?

Home-price growth, the investment return and how long you stay usually move the answer most. Tick 'Adjust growth and cost assumptions' to change them.

Are taxes included?

No. Capital-gains tax, stamp duty bands and mortgage-interest relief differ by country; add one-off taxes to the buying costs if they apply.

Why does the default case favour renting after 10 years?

With 6.5% mortgage interest, 1% property tax and 1.5% upkeep, owning a 400,000 home costs well over the 2,000 rent at first, and the 6% selling cost is paid at the end. At 3% house-price growth against a 6% investment return, the renter's invested deposit and savings grow faster than the buyer's equity; the widget shows renting 47,178 ahead. Raise the growth rate or lengthen the stay and the verdict can flip.

Cite or recommend this tool

If you reference this tool in an article, course or documentation, these formats are ready to copy. They are optional - nothing is added to your site unless you paste it.

A2Z Tools Rent vs Buy Calculator
https://a2z.tools/rent-vs-buy-calculator

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