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Rent vs buy a townhouse calculator
Put your townhouse price, HOA and rent in: $320,000 against $1,800 rent saves $73,271.89 over 10 years.
★ COMPARISONS · RENT VS BUY · TOWNHOUSE
Rent vs Buy a Townhouse: 10-Year Cost & Break-Even
On the defaults — a $320,000 townhouse, 10% down, 6.50% over 30 years, $250 a month HOA, against $1,800 a month rent growing 3% a year — buying nets $174,347.91 over 10 years, renting totals $247,619.79, so buying saves $73,271.89 and breaks even in year 4. This is the TOWNHOUSE version — a townhouse purchase against renting — the townhouse-vs-single-family-home page is the BUY-VS-BUY version — a townhouse purchase against a single-family purchase, not against renting; the rent-vs-buy-condo page is the CONDO version — the same 10-year comparison for a condo, not a townhouse; and the townhouse-vs-condo page is the TOWNHOUSE-VS-CONDO version — two purchases compared, not buy against rent.
What does buying saving $73,271.89 mean?
It means that over 10 years, owning the townhouse costs $174,347.91 once the equity you walk away with is counted, while renting the same lifestyle costs $247,619.79 with nothing to show for it — a $73,271.89 gap in buying’s favour. The gap is not the monthly payment: the monthly outlay of $2,520.36 is $720.36 more than the starting rent of $1,800, but $43,844.76 of principal and $110,053.24 of appreciation come back to the buyer at the end, and rent climbs 3% a year while the mortgage payment never moves.
Three things to check before you trust the number
Is the HOA really $250? Townhouse HOAs vary wildly, and the $450 branch shows the cost of a heavier one: buying net rises to $198,347.91 and the saving shrinks to $49,271.89, with break-even pushed to year 6. Ask for the HOA’s history of special assessments, not just this year’s dues.
Is 3% appreciation a promise? No — it is an assumption, and the 0% branch is the warning: with flat values buying nets $277,797.95 and renting saves $30,178.16, with no break-even inside 10 years. The appreciation reverse puts the tipping point at 0.96% a year: below it renting wins, above it buying wins.
Are you really staying 10 years? Break-even is year 4 on the defaults, so a move in year 2 or 3 flips the answer — the selling costs of 6% bite hardest on a short stay, when little principal has been paid and appreciation has had little time to work.
Worked example
On the defaults: $320,000 price, 10% down, 6.50% over 30 years, $250 HOA, $300 tax & insurance, $150 maintenance, $1,800 rent growing 3%, 3% appreciation, 6% selling costs.
- The down payment and loan: 10% of $320,000 is $32,000.00, so the loan is $288,000.00.
- The monthly payment: $288,000 at 6.50% over 360 months is $1,820.36 a month, and with HOA, tax & insurance and maintenance the monthly outlay is $2,520.36.
- Buying net: $32,000.00 down + 120 months of outlay ($302,442.72 at the unrounded monthly rate) + $25,803.19 selling costs − ($430,053.24 value − $244,155.24 balance) is $174,347.91.
- Renting total: $1,800 a month growing 3% a year for 10 years is $247,619.79.
- The verdict: $247,619.79 − $174,347.91 is $73,271.89 saved by buying, with break-even in year 4.
And the other way: the monthly rent that ties buying over 10 years is $1,267.37, the annual appreciation that ties buying over 10 years is 0.96%, and the purchase price that ties buying over 10 years is $579,519.06.
Every branch, checked
- $250,000 townhouse, $1,400 rent: $250,000 townhouse, $1,400 rent: Buying net $154,584.30 over 10 years; renting $192,593.17 — buying saves $38,008.87; break-even in year 6 (mortgage $1,422.15 a month).
- $450,000 townhouse, $2,400 rent: $450,000 townhouse, $2,400 rent: Buying net $211,051.74 over 10 years; renting $330,159.72 — buying saves $119,107.98; break-even in year 4 (mortgage $2,559.88 a month).
- $320,000 townhouse, 20% down at 7.00%: $320,000 townhouse, 20% down at 7.00%: Buying net $167,810.58 over 10 years; renting $247,619.79 — buying saves $79,809.21; break-even in year 4 (mortgage $1,703.17 a month).
- $320,000 townhouse, $2,400 rent: $320,000 townhouse, $2,400 rent: Buying net $174,347.91 over 10 years; renting $330,159.72 — buying saves $155,811.82; break-even in year 2 (mortgage $1,820.36 a month).
- $320,000 townhouse, $450 HOA: $320,000 townhouse, $450 HOA: Buying net $198,347.91 over 10 years; renting $247,619.79 — buying saves $49,271.89; break-even in year 6 (mortgage $1,820.36 a month).
- $320,000 townhouse, 0% appreciation: $320,000 townhouse, 0% appreciation: Buying net $277,797.95 over 10 years; renting $247,619.79 — renting saves $30,178.16; no break-even within 10 years (mortgage $1,820.36 a month).
The reverses, worked backwards
- Monthly rent that ties buying over 10 years: $1,267.37 — at the star the outcome is renting saves $0.19; at the lower neighbor the outcome is renting saves $1,375.85; at the upper neighbor the outcome is buying saves $1,375.48 — verdict: STEP.
- Annual appreciation that ties buying over 10 years: 0.96% — at the star the outcome is renting saves $21.40; at the lower neighbor the outcome is renting saves $3,284.93; at the upper neighbor the outcome is buying saves $3,271.34 — verdict: STEP.
- Purchase price that ties buying over 10 years: $579,519.06 — at the star the outcome is buying saves $0.00; at the lower neighbor the outcome is buying saves $282.34; at the upper neighbor the outcome is renting saves $282.34 — verdict: STEP.
What the defaults assume
The defaults are a $320,000 townhouse, 10% down, 6.50% fixed over 30 years, $250 HOA, $300 tax & insurance, $150 maintenance, $1,800 rent growing 3% a year, 3% appreciation and 6% selling costs, held for exactly 10 years. Buying net is defined as down payment plus 120 months of outlay plus selling costs, minus the net sale proceeds (final value less the remaining balance); renting total is 120 months of rent with the annual growth applied each year. The rent reverse is checked at $10 either side, because $10 of starting rent is $1,375.67 of 10-year rent at 3% growth; the appreciation reverse is checked at 0.10% either side, because 0.10% of appreciation is roughly $3,280 of value over 10 years. The model does not apply mortgage interest tax deductions, opportunity cost on the down payment, closing costs on purchase, or renters insurance — those belong to your tax return and your closing statement, not to the buy-versus-rent arithmetic.
Output · formula · meaning
| Output | Formula | What it means |
|---|---|---|
| Monthly mortgage payment | loan × r × (1+r)^360 ÷ ((1+r)^360 − 1) | $1,820.36 — $288,000 at 6.50% over 30 years. |
| Monthly outlay | payment + HOA + tax & insurance + maintenance | $2,520.36 — $1,820.36 + $250 + $300 + $150. |
| Buying net | down + 120 × outlay + selling costs − (value − balance) | $174,347.91 — $32,000.00 + $302,442.72 + $25,803.19 − $185,898.00 (outlay total from unrounded values). |
| Renting total | 12 × rent × (1 + 1.03 + … + 1.03^9) | $247,619.79 — $1,800 a month growing 3% a year. |
| Winner and margin | renting total − buying net | Buying saves $73,271.89; break-even in year 4. |
| $250,000 townhouse, $1,400 rent | same model | Buying net $154,584.30 over 10 years; renting $192,593.17 — buying saves $38,008.87; break-even in year 6 (mortgage $1,422.15 a month). |
| $450,000 townhouse, $2,400 rent | same model | Buying net $211,051.74 over 10 years; renting $330,159.72 — buying saves $119,107.98; break-even in year 4 (mortgage $2,559.88 a month). |
| $320,000 townhouse, 20% down at 7.00% | same model | Buying net $167,810.58 over 10 years; renting $247,619.79 — buying saves $79,809.21; break-even in year 4 (mortgage $1,703.17 a month). |
| $320,000 townhouse, $2,400 rent | same model | Buying net $174,347.91 over 10 years; renting $330,159.72 — buying saves $155,811.82; break-even in year 2 (mortgage $1,820.36 a month). |
| $320,000 townhouse, $450 HOA | same model | Buying net $198,347.91 over 10 years; renting $247,619.79 — buying saves $49,271.89; break-even in year 6 (mortgage $1,820.36 a month). |
| $320,000 townhouse, 0% appreciation | same model | Buying net $277,797.95 over 10 years; renting $247,619.79 — renting saves $30,178.16; no break-even within 10 years (mortgage $1,820.36 a month). |
| Monthly rent that ties buying over 10 years | reverse | $1,267.37: renting saves $0.19 |
| Annual appreciation that ties buying over 10 years | reverse | 0.96%: renting saves $21.40 |
| Purchase price that ties buying over 10 years | reverse | $579,519.06: buying saves $0.00 |
| $0 purchase price | same model | Purchase price — more than $0. |
| 0% mortgage rate | same model | Buying net −$250.05 over 10 years; renting $247,619.79 — buying saves $247,869.84; break-even in year 1 (mortgage $800.00 a month). |
| 100% down payment | same model | Buying net −$250.05 over 10 years; renting $247,619.79 — buying saves $247,869.84; break-even in year 1 (mortgage $0.00 a month). |
| $0 rent | same model | Buying net $174,347.91 over 10 years; renting $0.00 — renting saves $174,347.91; no break-even within 10 years (mortgage $1,820.36 a month). |
Who uses this
- A renter weighing a first townhouse — the year-4 break-even says a 10-year stay wins by $73,271.89, but a 2-year stay would not, and the page shows both.
- A buyer comparing HOA loads — the $250 and $450 branches differ by $24,000 of buying net, which is the real price of a heavy HOA.
- An agent answering “should I rent or buy?” — the rent reverse ($1,267.37) and appreciation reverse (0.96%) give two clean tipping points to quote.
- A student learning compound growth on real money — one worked example from mortgage payment to equity to verdict, with rent growth and appreciation side by side.
Accuracy & limitations
Figures are the model’s own arithmetic on the numbers you type, computed from unrounded values and displayed rounded HALF_UP to 2dp. The main limitation is the forecast, not the arithmetic: appreciation, rent growth and HOA dues are assumptions, and the 0% appreciation branch shows how much the verdict depends on them. The model ignores tax deductions, closing costs, opportunity cost and renters insurance, and this page is a calculation tool, not financial advice.
Cite this calculator
Buying a $320,000 townhouse beats renting at $1,800 a month over 10 years by $73,271.89, breaking even in year 4. Source: Bright Side Kit, brightoolbox.com.
Frequently asked questions
Is it better to rent or buy a townhouse?
On the defaults, buying wins by $73,271.89 over 10 years. Buying nets $174,347.91 against $247,619.79 of rent, breaking even in year 4 — but only if you stay long enough and values do not stay flat.
When does buying a townhouse break even against renting?
Year 4 on the defaults. With a $450 HOA it slips to year 6, and with 0% appreciation there is no break-even inside 10 years.
What rent would make renting as cheap as buying?
$1,267.37 a month. At that rent the 10-year totals tie within $0.19; at $1,277.37 buying saves $1,375.48.
How much appreciation does buying need to win?
About 0.96% a year. At 0.96% renting still saves $21.40; at 1.06% buying saves $3,271.34.
What does the HOA do to the buy-vs-rent math?
It is a straight monthly cost of owning. Raising the HOA from $250 to $450 adds $24,000 to buying net over 10 years and cuts the saving to $49,271.89.
What if I buy and sell after only a few years?
Short stays usually lose. Selling costs of 6% and little principal paid mean the break-even year matters more than the 10-year headline — check the year-by-year path, not just the total.
Does this include tax deductions or closing costs?
No. Mortgage interest deductions, closing costs, opportunity cost on the down payment and renters insurance are all left out, so treat the verdict as a cost comparison, not a full financial plan.