Results Summary

"When I saw [this calculator], I was immediately jealous. The author is certainly right - his calculator is far more complex and accurate than anything else that I have seen. I highly recommend that you use it." -- The Legal Dollar

"The Michael Bluejay calculator that I discussed in my previous article will tell you which way is better for your particular situation. I personally find it to be a good calculator and I will urge you to try it i.e. if you haven't." -- Joel D. Ramphoi of The Botswana Gazette and Market Risk Manager at Stanbic Bank Botswana

"It's the best, most customizable calc I've seen on the topic." -- Digg.com reader

"Probably the best and most complete renting vs. buying calculator I've seen." -- TheAmateurFinancier.com

"If you are trying to decide if you want to rent or buy, [Bluejay's] calculator may be the best tool I've found for that." -- Martha O'Hayer. realtor with Frank Howard Allen Realtors

This calculator is used in the IT1020 class at Central New Mexico Community College taught by Denise Weaver Ross.

It's almost always better to buy a home than to rent. Only when at least one of the following applies is it probably better to rent:

• Your rent is lower than average —and you expect it to stay that way.
• You plan on moving in a few years.
• You're in a super-expensive housing market (like San Francisco or Honolulu). Otherwise, Trulia says that buying is now better than renting in 98 out of the 100 largest U.S. metro areas.
• You can get better-than-average returns from whatever you're investing your cash into.
• The house you would buy is a lot larger than what you would rent.

Everyone's situation is different, and that's what this calculator is for: It'll give you an answer for your specific situation.

Here's a very handy rule of thumb I came up with: Just multiply your monthly rent by 240. If you can buy a house for less than that, then buying is usually better in the long-term.

There are lots of rent vs. buy calculators on the net but I found most of them confusing, hard to use, or woefully incomplete. So I set out to make the ultimate rent-vs.-buy calculator, which would be easy to understand, easy to use, have every field explicitly defined, and provide both a really useful summary as well as detailed year-by-year data. Here's why I think this calculator is better than the rest:

• Includes sample values so you can see a comparison right away
• Automatically calculates PMI/FHA fees, closing costs, taxes insurance, and maintenance based on the purchase price
• Automatically recalculates when you change any value
• All input and results are shown the same page
• Shows you the results year-by-year (not just at the end of the mortgage term)
• Optionally shows results for a full 40 years into the future
• Shows the value of each of 19 different variables, for each and every year
• Built-in help for every input field

There's no other calculator on the net that does all this.

I'm offering a cash prize of $100 to anyone who finds a calculation error of more than $1000 in the Results Summary using the default values (excluding: rounding errors/differences, an alternate way of estimating some figure which necessarily has to be estimated rather than calculated exactly, and differing tax results based on changes to the tax code, since it's always changing).)

Remember, any calculator is only as good as the assumptions. If you put bad data in, you'll get bad data out. One of the biggest factors in whether it's better to buy or rent is the appreciation rate: A small change in the appreciation rate means a big difference in the bottom line. Unfortunately you (and I) can't predict future appreciation rates, so the answer we get from any calculator doesn't come with any degree of certainty about what's actually going to happen. Still, it's worth knowing whether buying looks much better or much worse than renting, given reasonable assumptions.

Mega Data Table! (detailed results of Rent vs. Buy)

In pink-row years renting is better. In green-row years buying is better.