Compare the true long-term cost of buying a home in cash versus renting and investing the difference — with a year-by-year net wealth chart, break-even year, and a clear recommendation.
📂 Real Estate & Investing🏷️ Purchase details
🏘️ Renting
📈 Assumptions
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Deciding whether to buy or rent is rarely just about monthly payment size — it's about which path leaves you with more net wealth by the end of a chosen period. This calculator builds a cash-purchase model: it treats buying as paying with the cash you specify (plus, optionally, a financing installment you already know from your own arrangement, with no interest calculated by Ihsabha), and treats renting as keeping that same cash invested at a return rate you choose. Each year, it compares what a buyer actually pays in property tax, maintenance, insurance, and fees against what a renter pays in rent, and tracks how that difference compounds. The result is a projected net wealth figure for each path at the end of the period, a break-even year showing when buying starts to outperform renting under your assumptions, and a year-by-year chart so you can see the full trajectory rather than a single snapshot.
Comparing rent and a mortgage-style payment side by side is tempting because it's simple, but it misses the two things that usually decide the real outcome: what happens to the property's value, and what happens to the money a renter never spends on a down payment. A home that appreciates steadily can turn a higher monthly cost into a winning long-term position once you sell, while a renter who consistently invests the gap between rent and ownership costs can build a competing pool of wealth without ever owning property. Looking at net wealth side by side, rather than monthly cash flow alone, is what lets both effects show up in the comparison.
The break-even year answers a different, very practical question: assuming your inputs hold, at what point does buying start to make more financial sense than renting? Early in a holding period, the upfront purchase costs and the opportunity cost of tying up cash in a down payment often make renting look better on paper. As appreciation compounds and rent keeps climbing while ownership costs grow more slowly (property tax and maintenance rise with home value, but a fixed financing installment or paid-off home does not), the balance can tip toward buying — and the year that happens is exactly what the break-even figure shows.
Because Ihsabha does not calculate interest of any kind, this tool intentionally leaves mortgage math out of the picture. If you already know a financing installment from a Murabaha, Ijara, or Diminishing Musharaka agreement, you can enter that fixed monthly figure directly, and the calculator treats it exactly like any other ownership cost — no interest formula involved. This keeps the comparison honest for cash buyers and Islamic-finance users alike, while still producing a genuinely useful side-by-side projection.
No. Ihsabha does not calculate riba (interest) of any kind. If part of the purchase is financed, enter the monthly installment you already know from your own financing arrangement (for example, a Murabaha or Ijara payment) in the optional financing field, and the calculator simply treats it as a cash outflow like any other ownership cost.
It is the first year in the analysis period where owning is projected to leave you with more net wealth than renting and investing the difference, based on the figures you entered. Before that year, renting comes out ahead in this model; after it, buying does.
The model assumes the cash you would otherwise put toward a down payment and purchase costs is instead invested at your chosen return rate for the full period, and that any year your ownership costs would have exceeded rent, the renter invests that difference too (and vice versa).
Ihsabha does not offer interest-based (riba) financial tools. This calculator is built around a cash-purchase comparison, with an optional field for a financing installment you already know, rather than computing interest itself.
Yes — enter any currency code you like in the currency field. Every figure is a plain calculation on the numbers you provide, so the results are equally valid in any currency.