Housing Decisions Calculators

Rent-vs-buy and lease-vs-buy are horizon problems: neither has a universal answer, only an answer for a specific number of years. Both calculators work the same way. They total every cost of each path over the horizon you choose, then compare end states — including what you would own at the end (home equity, or a car’s resale value) and what the money you did not spend could have earned if it had been invested instead.

That last piece — opportunity cost — is what the naive comparison leaves out. Setting rent against a mortgage payment ignores that the down payment, closing costs, and the ownership expenses above rent could have been invested; the rent-vs-buy tool grows that forgone money at an investment return you set and counts it in renting’s favor. On the other side it credits buying with principal paydown and home appreciation at your assumed rate, and it charges each path its own costs — property tax, upkeep, and buying and selling costs on one side, rent growth on the other. The headline output is a break-even year: the horizon at which the two paths cost the same under your assumptions. Because upfront costs dominate the early years and equity accumulates late, the answer usually flips as the horizon lengthens — and it moves substantially when the appreciation and investment-return inputs change, which is why the tool is built for testing scenarios rather than settling arguments.

The car version applies the identical framework to leasing versus financing. Lease costs are payments and fees with nothing owned at the end; buying costs are payments and more upfront cash, offset by whatever the car is worth when your horizon ends. Because a car depreciates while a house is usually assumed to appreciate, the resale-value input dominates lease-vs-buy the way appreciation dominates rent-vs-buy. Each tool reports the net cost of both paths over your horizon, so the comparison is like-for-like.