Question 1

How does the rent vs buy calculator work?

Accepted Answer

It models the total cost of renting (including rent inflation and invested savings) against buying (down payment, mortgage payments, maintenance, and property appreciation). The break-even year shows when buying becomes cheaper than renting.

Question 2

What is the break-even year?

Accepted Answer

The break-even year is the point at which the cumulative cost of buying becomes less than the cumulative cost of renting. If no break-even is found within the analysis period, renting is cheaper throughout.

Question 3

Does the calculator account for investment returns?

Accepted Answer

Yes, when renting, the money saved on down payment and lower monthly costs (compared to mortgage) is assumed to be invested at your specified annual return rate. This gives a fair comparison.