Rent versus buy cash-cost scenario
Compare rent with ownership cash payments plus down payment and transaction costs minus net equity recovered at sale.
How this works
Over y years, rent cost = monthly rent × 12y. Buying net cash cost = monthly ownership cost × 12y + nonrecoverable transaction costs + initial down payment − equity recovered at sale. The displayed difference is buying net cash cost minus rent cost; a positive result means the entered buying scenario costs more.
Example
The illustration may use different inputs from the reproducible default inputs listed below.
For five years, default rent is $2,000 × 60 = $120,000. Buying net cash cost is $2,700 × 60 + $20,000 + $60,000 − $30,000 = $212,000. With all reset-default inputs, buying net cost minus renting: $92,000.
- Monthly rent ($)
- 2000
- Monthly ownership cash cost ($)
- 2700
- Nonrecoverable buying and selling costs ($)
- 20000
- Initial down payment ($)
- 60000
- Comparison years
- 5
- Expected equity recovered at sale ($)
- 30000
- Buying net cost minus renting
- $92,000
Scope and assumptions
Ownership cash cost must include the costs you want counted, such as mortgage payments, taxes, insurance and upkeep. Recovered equity is your input and includes returned down payment, principal paid and any assumed value change. Opportunity cost, changing rent or ownership costs and tax benefits are excluded. This is not an affordability or investment recommendation.
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