Should you rent or buy a home and what are the long-term costs? On the one hand, you're tired of your landlord. On the other hand, buying a home likely means borrowing a lot of money. As well, when buying a home you must make a down payment, money that could otherwise be invested or put into savings. What should you do?

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Your Information

(Modify the values presented below according to your needs)

Funds available for real estate and/or investment:	$
Disposable monthly income available for housing or investing:	$
Estimate of the long-term inflation rate:		%
Estimate of after-tax return on portfolio investments:		%
Input related to the purchased residence:
Annual equivalent (APR) mortgage rate:		%
Down payment:	$
Months until maturity, amortization period (max 360):		months
Monthly expenses for purchased residence:	$
Expected (after-tax)return on real estate:		%
Market value of the purchased residence:	$
Input related to the rented residence:
Monthly rent:	$
Monthly expenses associated with the rental:	$

Your Result

Total Wealth, Real Dollars

If savings are all reinvested

Years		Buy House		Rent House		Difference
5	$		$		$
10	$		$		$
15	$		$		$
30	$		$		$

If savings are not reinvested

Years		Buy House		Rent House		Difference
5	$		$		$
10	$		$		$
15	$		$		$
30	$		$		$

We offer this calculator as a self-help tool for your use. The information is not meant to replace professional financial advice. We cannot guarantee that this calculator will apply or be accurate in your situation. All calculations are examples only.

Important notice: This calculator assumes that if you rent, you will invest all the money you would have used as a down payment. In addition, the calculator assumes that the money saved from renting relative to owning a home would also be invested. Many (perhaps even most) people may be tempted to spend rather than invest the savings. For those with less than iron self discipline, buying a home could constitute a form of forced savings.

* We wish to thank York University Professor Moshe A. Milevsky, and researchers at the Individual Finance and Insurance Decisions (IFID)Centre, a non-profit corporation, housed at the Fields Institute in Toronto, for developing the content of this calculator.