About BuyRentLab

What is BuyRentLab?

BuyRentLab is a free, open calculator that answers one of the biggest financial questions most people face: should you buy a home or keep renting and invest the difference? Unlike simple rent-vs-mortgage comparisons, our tool runs a full month-by-month simulation of both scenarios over your chosen time horizon - tracking mortgage amortization, home equity, investment growth, taxes, and every recurring cost on both sides.

There are over 20 adjustable inputs so you can model your exact situation. Every assumption is visible and editable. Nothing is hidden behind a black box.

Why we built this

Most buy-vs-rent calculators on the internet are published by mortgage lenders, real estate brokerages, or listing platforms. They have a financial incentive to make buying look attractive - and their tools often reflect that bias through optimistic default assumptions, missing costs, or by ignoring the opportunity cost of a down payment.

We wanted a tool that starts from the data. Research from Robert Shiller shows that inflation-adjusted home prices were essentially flat from 1890 to the late 1990s. The Financial Planning Association has published studies showing that renting and investing the difference outperforms buying in many major metro areas over 10-year horizons. Meanwhile, the S&P 500 has delivered roughly 10% nominal annual returns over the long run - significantly outpacing average home appreciation.

None of this means buying is always wrong. In many cities and time frames, buying is clearly the better financial move. But the answer depends heavily on local prices, rents, interest rates, how long you stay, and your discipline in investing what you save. Our goal is to give you a clear, honest comparison so you can make that decision with real numbers - not rules of thumb.

Methodology

The calculator runs a month-by-month simulation for both buying and renting over your chosen time horizon (up to 30 years). On the buying side, it tracks the full mortgage amortization schedule, property taxes, homeowners insurance, HOA fees, maintenance costs, and the tax benefit of the mortgage interest deduction. On the renting side, it tracks monthly rent (growing annually), renters insurance, and invests the difference between buying costs and renting costs into a diversified portfolio.

Investment returns are modeled after tax using your marginal tax rate and the capital gains rate, with a configurable stock/bond allocation. At the end of the period, the buying scenario accounts for selling costs (typically 5-6% in agent commissions, transfer taxes, and closing costs). The final comparison shows your net wealth under each scenario.

Data sources

Our city-level presets draw from publicly available data to set realistic local defaults:

• -Home prices and appreciation: Zillow Home Value Index (ZHVI) and Redfin median sale prices, updated regularly.
• -Rent data: RentCafe, Zillow Observed Rent Index (ZORI), and Census American Community Survey (ACS) for city-level median rents.
• -Mortgage rates: Freddie Mac Primary Mortgage Market Survey, updated weekly.
• -Property tax rates: Census ACS and county-level tax assessor data.
• -Investment returns: Long-run S&P 500 returns (roughly 10% nominal) and historical bond yields from Federal Reserve Economic Data (FRED).
• -Historical home price trends: Robert Shiller's long-run home price index, tracking inflation-adjusted housing values back to 1890.

Research behind the defaults

Our default assumptions are grounded in published research and long-run historical data rather than current-year optimism:

• -Home appreciation (3.5% nominal): Consistent with Shiller's long-run data showing roughly 0.5-1% real appreciation. Short-term booms happen, but they also correct.
• -Investment returns (7% nominal): Based on a balanced stock/bond portfolio. The S&P 500 alone has returned roughly 10% nominally over the past century, but a diversified allocation with bonds brings the expected return lower.
• -Rent growth (3% annually): Aligned with historical national averages from the Bureau of Labor Statistics CPI rent component.
• -Maintenance (1% of home value per year): A widely cited rule of thumb supported by studies from the National Association of Home Builders.

Every one of these defaults can be adjusted. If you believe your local market will appreciate faster, or that you'll earn higher investment returns, change the numbers and see how the result shifts. Transparency is the point.