Choosing whether to rent or buy a home is a significant financial decision. This calculator helps you compare the costs associated with both options over a specified period, allowing you to make a more informed choice.
function calculateRentVsBuy() {
var monthlyRent = parseFloat(document.getElementById("monthlyRent").value);
var downPayment = parseFloat(document.getElementById("downPayment").value);
var homePrice = parseFloat(document.getElementById("homePrice").value);
var annualInterestRate = parseFloat(document.getElementById("interestRate").value);
var loanTermYears = parseInt(document.getElementById("loanTerm").value);
var annualPropertyTaxRate = parseFloat(document.getElementById("propertyTax").value);
var annualHomeInsurance = parseFloat(document.getElementById("homeInsurance").value);
var annualMaintenanceRate = parseFloat(document.getElementById("maintenanceRepairs").value);
var closingCostsRate = parseFloat(document.getElementById("closingCosts").value);
var annualInvestmentReturnRate = parseFloat(document.getElementById("investmentReturnRate").value);
var yearsToCompare = parseInt(document.getElementById("yearsToCompare").value);
var resultDiv = document.getElementById("result");
resultDiv.innerHTML = ""; // Clear previous results
// Input validation
if (isNaN(monthlyRent) || isNaN(downPayment) || isNaN(homePrice) || isNaN(annualInterestRate) || isNaN(loanTermYears) || isNaN(annualPropertyTaxRate) || isNaN(annualHomeInsurance) || isNaN(annualMaintenanceRate) || isNaN(closingCostsRate) || isNaN(annualInvestmentReturnRate) || isNaN(yearsToCompare) ||
monthlyRent < 0 || downPayment < 0 || homePrice <= 0 || annualInterestRate < 0 || loanTermYears <= 0 || annualPropertyTaxRate < 0 || annualHomeInsurance < 0 || annualMaintenanceRate < 0 || closingCostsRate < 0 || annualInvestmentReturnRate < 0 || yearsToCompare 0) {
monthlyMortgagePayment = principal * (monthlyInterestRate * Math.pow(1 + monthlyInterestRate, loanTermMonths)) / (Math.pow(1 + monthlyInterestRate, loanTermMonths) – 1);
} else {
monthlyMortgagePayment = principal / loanTermMonths;
}
var annualMortgagePayment = monthlyMortgagePayment * 12;
var annualPropertyTax = homePrice * (annualPropertyTaxRate / 100);
var annualMaintenanceCost = homePrice * (annualMaintenanceRate / 100);
var annualTotalHomeownershipCosts = annualMortgagePayment + annualPropertyTax + annualHomeInsurance + annualMaintenanceCost;
var initialClosingCosts = homePrice * (closingCostsRate / 100);
// Calculate total buying costs over the comparison period
var totalBuyingCostOverYears = initialClosingCosts;
var remainingMortgageBalance = principal;
var totalInterestPaid = 0;
for (var i = 0; i < yearsToCompare; i++) {
var annualInterestForYear = 0;
var principalPaidForYear = 0;
for (var m = 0; m < 12; m++) {
var monthlyInterest = remainingMortgageBalance * monthlyInterestRate;
var monthlyPrincipal = monthlyMortgagePayment – monthlyInterest;
annualInterestForYear += monthlyInterest;
principalPaidForYear += monthlyPrincipal;
remainingMortgageBalance -= monthlyPrincipal;
if (remainingMortgageBalance < 0) remainingMortgageBalance = 0;
}
totalInterestPaid += annualInterestForYear;
totalBuyingCostOverYears += annualMortgagePayment + annualPropertyTax + annualHomeInsurance + annualMaintenanceCost;
}
// Subtract any remaining mortgage balance if it's less than the initial principal (effectively equity)
// For a simplified comparison, we'll consider the full payments made.
// A more complex model would account for selling costs and equity upon sale.
// — Opportunity Cost of Down Payment and Equity —
// The down payment could have been invested.
// Equity built up through principal payments could also have been invested.
var opportunityCost = 0;
var currentInvestedAmount = downPayment; // Start with down payment
for (var i = 0; i 0) {
tempMonthlyPayment = principal * (monthlyInterestRate * Math.pow(1 + monthlyInterestRate, loanTermMonths)) / (Math.pow(1 + monthlyInterestRate, loanTermMonths) – 1);
} else {
tempMonthlyPayment = principal / loanTermMonths;
}
for (var m = 0; m < 12; m++) {
var tempMonthlyInterest = tempRemainingBalance * monthlyInterestRate;
var tempMonthlyPrincipal = tempMonthlyPayment – tempMonthlyInterest;
annualPrincipalPaid += tempMonthlyPrincipal;
tempRemainingBalance -= tempMonthlyPrincipal;
if (tempRemainingBalance < 0) tempRemainingBalance = 0;
}
currentInvestedAmount += annualPrincipalPaid;
}
var totalOpportunityCost = opportunityCost;
var totalCostOfBuying = initialClosingCosts + totalBuyingCostOverYears – (homePrice – remainingMortgageBalance) ; // Approximate net cost after accounting for equity
var totalNetCostOfRenting = totalRentCost;
var outputHTML = "