Interactive Lab
Purchase vs. Lease Calculator
Purchase vs. Lease (Own vs. Rent) Calculator
For an owner-occupant deciding whether to buy or keep renting -- before any financing structure is even relevant.
$1,000,000
$
20%
6%
25 yrs
$30,000
$
3%
$80,000
$
3%
10 yrs
6%
Total Cost of Owning
$466,064
Net of sale proceeds at the end of the hold
Total Cost of Leasing
$917,110
Net Advantage of Buying
$451,047
Positive means buying is cheaper over this hold period
Ignores income-tax effects (interest and depreciation deductions, lease deductibility) and assumes flat annual occupancy costs -- a first-pass comparison, not a full after-tax analysis.
Learn the concept behind this tool