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Rent vs. Buy Calculator

compare_rent_vs_buy
Read-onlyIdempotent

Calculation, not advice. Verify with a professional before acting. Deterministic rent-vs-buy decision model. Given a home price, monthly rent, and mortgage rate, computes the breakeven month (when BUY net worth first equals or exceeds RENT net worth), per-horizon net-worth comparison (years 5, 10, 30 + user horizon), and the full year-by-year cost/wealth series for both paths.

Includes carrying costs (property tax, insurance, maintenance, PMI, HOA) on the BUY path and opportunity-cost investing on the RENT path.

Optional federal tax benefit model (Tier-3: apply_tax_benefit=true) with the statute's year-by-year SALT cap schedule (advancing with the horizon, not frozen at tax_year), mortgage interest deduction, PMI deductibility, and marginal-excess formula.

All assumptions cite primary sources (FHFA, BLS, Harvard JCHS, IRS Pub 936, OBBBA Pub. L. 119-21) and can be overridden.

Pick this for the buy-vs-rent tenure decision; pick compare_mortgage_terms when you are already buying and comparing two mortgage structures, compare_payoff_strategies to order credit-card payoff, and compare_payoff_vs_invest to weigh extra debt payments against investing.

HEAVY tool: use output='summary' (default) for scalar headline or output='inline' for chart series.

Input Schema

TableJSON Schema
NameRequiredDescriptionDefault
outputNoValid values: 'summary' (default), 'inline'. 'summary' returns headline scalars and per-horizon snapshots with the heavy series stripped. 'inline' returns the full payload including yearly_series[] and monthly_series[] for chart rendering.
pmi_pctNoAnnual PMI rate as a percentage of the loan. Decimal from 0 to 5. Optional; defaults to 0.5% when omitted. The removal threshold is set by pmi_removal_ltv_pct.
tax_yearNoTax year for year 1 of the horizon: 2025 or 2026. Integer. Required when apply_tax_benefit is true; otherwise not used. Horizon year y uses tax year (tax_year + y - 1) on both the tax benefit and the sale-side capital-gains tax; the SALT cap follows the statute's own schedule for that year, and every other indexed amount holds at its last-loaded table value beyond it.
charitableNoCharitable contributions. Decimal from 0 to 1,000,000,000; TY2026 and later apply a 0.5%-of-AGI floor per OBBBA §70425. Only used when apply_tax_benefit is true. Optional; defaults to 0 when omitted.
home_priceYesHome purchase price. Decimal, greater than 0 and at most 1,000,000,000. REQUIRED, no default.
pmi_annualNoAnnual PMI premium in dollars while PMI is active. Decimal from 0 to 1,000,000,000. Only used when apply_tax_benefit is true. Optional; when omitted it is derived from pmi_pct and the original loan amount.
real_termsNoWhether to deflate the output series to a real-terms view. Optional; defaults to false when omitted.
blind_countNoNumber of blind filers, each adding the additional standard deduction. Integer from 0 to 2. Only used when apply_tax_benefit is true. Optional; defaults to 0 when omitted.
chart_titleNoOverride for the chart title. Must not contain em-dashes or en-dashes. Max 120 characters. Optional.
hoa_monthlyNoMonthly HOA dues on the BUY path. Decimal from 0 to 1,000,000,000. Optional; defaults to 0 when omitted.
monthly_rentYesMonthly rent on the RENT path. Decimal from 0 to 1,000,000,000; 0 is valid (a free-housing baseline). REQUIRED, no default.
filing_statusNoTax filing status: 'Single', 'MFJ', 'MFS' or 'HoH'. Required when apply_tax_benefit is true; otherwise not used.
horizon_yearsNoProjection horizon in years. Integer from 1 to 40. Optional; when omitted, the response returns snapshots at years 5, 10 and 30.
inflation_pctNoInflation as a percentage, for the real_terms toggle. Decimal, at least 0 and less than 100. Optional; when omitted, a nominal run uses 2.5%, and a real_terms run uses the horizon-based default: 2.0% for a horizon of 7 years or less, 2.6% for 8 to 19 years, 2.5% for 20 years or more.
sell_side_pctNoSell-side transaction cost as a percentage of the sale price. Decimal from 0 to 25. Optional; defaults to the cited 7.5% (Redfin post-NAR) when omitted; override for your market.
maintenance_pctNoAnnual maintenance as a percentage of home value. Decimal from 0 to 20. Optional; defaults to the cited 1.5% (Harvard JCHS) when omitted; override for your market.
rent_growth_pctNoAnnual rent escalation as a percentage. Decimal from -50 to 50. Optional; defaults to the cited 3.4% (BLS CPI ROPR) when omitted; override for your market.
state_local_taxNoState and local tax paid (state income or sales tax), for the SALT cap. Decimal from 0 to 1,000,000,000. Only used when apply_tax_benefit is true. Optional; defaults to 0 when omitted.
down_payment_pctNoDown payment as a percentage of the home price. Decimal from 0 to 100; 0 is valid (zero-down programs). Optional; defaults to 20% when omitted.
loan_term_monthsNoMortgage term in months. Integer from 1 to 480. Optional; defaults to 360 (a 30-year fixed) when omitted.
other_itemizableNoOther itemizable deductions, such as medical expenses above 7.5% of AGI or casualty losses. Decimal from 0 to 1,000,000,000. Only used when apply_tax_benefit is true. Optional; defaults to 0 when omitted.
property_tax_pctNoAnnual property tax as a percentage of home value. Decimal from 0 to 10. Optional; defaults to 0.88% when omitted; override for your market.
age_65_plus_countNoNumber of filers aged 65 or older, each adding the additional standard deduction. Integer from 0 to 2. Only used when apply_tax_benefit is true. Optional; defaults to 0 when omitted.
apply_tax_benefitNoWhether to apply the federal tax benefit model (SALT cap following the statute's year-by-year schedule, mortgage interest deduction, PMI deductibility). When true, filing_status, tax_year and annual_gross_income are required. Optional; defaults to false when omitted. The §121 home-sale gain exclusion applies only at sale points 24 months or more after purchase (IRC §121(a) 2-of-5-year test); year 1 of yearly_series, months 1-23 in monthly_series, and any horizon under 24 months use no exclusion. Separately, IRC §1222(3) makes a holding period of 12 months or less short-term, taxed at ordinary rates instead of the long-term rates otherwise applied, on the home-sale gain and the renter's portfolio gain alike (24 months vs. 12 months are two different thresholds); this tool applies that split exactly to the home-sale gain, and to the renter's portfolio at annual grain: prior years' contributions are compounded together as one long-term lot rather than aged individually, so months inside a year understate short-term gain.
mortgage_rate_pctYesMortgage annual rate as a percentage, e.g. 6.75 for 6.75%. Decimal, greater than 0 and at most 100. Never cached; provide the current rate. REQUIRED, no default.
home_insurance_pctNoAnnual home insurance as a percentage of home value. Decimal from 0 to 15. Optional; defaults to 0.65% when omitted; override for your market.
annual_gross_incomeNoAnnual gross income, the MAGI proxy for the bracket and the SALT cap. Decimal from 0 to 1,000,000,000. Required when apply_tax_benefit is true; otherwise not used.
pmi_removal_ltv_pctNoLoan-balance trigger for PMI removal, as a percentage loan-to-value. Decimal from 50 to 100. Optional; omitted, it is the 78% HPA automatic-termination threshold; provided (e.g. 80), it is whichever of 78% or your value is reached first. The rejection guard applies only when down_payment_pct is below 20 and the resolved pmi_pct is above 0, the range where PMI applies: there, a value at or above the loan's own initial LTV is rejected, because the requested removal point would already be met at the first payment, so no PMI would be modeled for any month of the loan. When the resolved pmi_pct is 0, or down_payment_pct is 20 or more, no such check runs, whatever the LTV. Either way PMI also stops at the statutory amortization midpoint of the original term (12 U.S.C. §4901(7), §4902(c)), which this value cannot postpone.
purchase_year_pointsNoDiscount points paid at origination, as a percentage of the loan. Decimal from 0 to 4. Counted as cash paid at closing on every call; when apply_tax_benefit is true they are also deducted in year 1. Optional; defaults to 0 when omitted.
home_appreciation_pctNoAnnual home price appreciation as a percentage. Decimal from -50 to 50. Optional; defaults to the cited 4.25% (FHFA HPI) when omitted; override for your market.
investment_return_pctNoRENT path annual return as a percentage, an EFFECTIVE ANNUAL rate; the monthly compounding step is (1+pct/100)^(1/12)-1. Decimal from -50 to 30. Optional; defaults to 10.0% when omitted.
loan_origination_dateNoMortgage origination date, YYYY-MM-DD. Selects the mortgage interest deduction cap: on or before 2017-12-15 the $1M cap, after it the $750k cap (Single and MFJ; MFS caps are half). Only used when apply_tax_benefit is true. Optional; omitting it uses the post-2017 cap.
basis_capitalizable_pct_overrideNoPercentage of the buy-side closing cost that is capitalizable into the §121 adjusted basis (IRS Pub 523 split: abstract fees, title search, recording fees, survey fees, transfer taxes, owner's title insurance). Decimal from 0 to 100; 0 means a HomePrice-only basis, 100 means the full closing cost is in basis. Optional; defaults to 50% (Senaro deterministic midpoint) when omitted. Supply your actual HUD-1 split when available.

Schema Changelog

Changes observed during successful MCP inspections.

  1. Changed2 schema fields changed
    • changedInput schema / properties / apply_tax_benefit / description
      Previous value: -"Whether to apply the federal tax benefit model (TY2025/TY2026 SALT caps, mortgage interest deduction, PMI deductibility). When true, filing_status, tax_year and annual_gross_income are required. Optional; defaults to false when omitted. The §121 home-sale gain exclusion applies only at sale points 24 months or more after purchase (IRC §121(a) 2-of-5-year test); year 1 of yearly_series, months 1-23 in monthly_series, and any horizon under 24 months use no exclusion. Separately, IRC §1222(3) makes a holding period of 12 months or less short-term, taxed at ordinary rates instead of the long-term rates otherwise applied, on the home-sale gain and the renter's portfolio gain alike (24 months vs. 12 months are two different thresholds); this tool applies that split exactly to the home-sale gain, and to the renter's portfolio at annual grain: prior years' contributions are compounded together as one long-term lot rather than aged individually, so months inside a year understate short-term gain."New value: +"Whether to apply the federal tax benefit model (SALT cap following the statute's year-by-year schedule, mortgage interest deduction, PMI deductibility). When true, filing_status, tax_year and annual_gross_income are required. Optional; defaults to false when omitted. The §121 home-sale gain exclusion applies only at sale points 24 months or more after purchase (IRC §121(a) 2-of-5-year test); year 1 of yearly_series, months 1-23 in monthly_series, and any horizon under 24 months use no exclusion. Separately, IRC §1222(3) makes a holding period of 12 months or less short-term, taxed at ordinary rates instead of the long-term rates otherwise applied, on the home-sale gain and the renter's portfolio gain alike (24 months vs. 12 months are two different thresholds); this tool applies that split exactly to the home-sale gain, and to the renter's portfolio at annual grain: prior years' contributions are compounded together as one long-term lot rather than aged individually, so months inside a year understate short-term gain."
    • changedInput schema / properties / tax_year / description
      Previous value: -"Tax year: 2025 or 2026. Integer. Required when apply_tax_benefit is true; otherwise not used."New value: +"Tax year for year 1 of the horizon: 2025 or 2026. Integer. Required when apply_tax_benefit is true; otherwise not used. Horizon year y uses tax year (tax_year + y - 1) on both the tax benefit and the sale-side capital-gains tax; the SALT cap follows the statute's own schedule for that year, and every other indexed amount holds at its last-loaded table value beyond it."
  2. Added

TDQS

A4.6/5.0
Behavior5/5

Does the description disclose side effects, auth requirements, rate limits, or destructive behavior?

Annotations already declare readOnly/idempotent/non-destructive, and the description goes well beyond them: it flags determinism, a 'calculation, not advice' disclaimer, which assumption values are cited defaults that can be overridden, and that apply_tax_benefit switches on a heavier tax model whose SALT cap advances with the horizon. It also discloses the return shape (headline scalars vs full yearly/monthly series) in the absence of an output schema.

Agents need to know what a tool does to the world before calling it. Descriptions should go beyond structured annotations to explain consequences.

Conciseness4/5

Is the description appropriately sized, front-loaded, and free of redundancy?

The routing rules and the heavy-payload warning are in the final two paragraphs rather than front-loaded, and the tax-model middle section is dense. Still, nearly every sentence carries either a behavioral fact or a disambiguation rule, so there is little waste.

Shorter descriptions cost fewer tokens and are easier for agents to parse. Every sentence should earn its place.

Completeness5/5

Given the tool's complexity, does the description cover enough for an agent to succeed on first attempt?

For a 33-parameter financial model with no output schema, the description covers what is computed, which costs are modeled on each path, the optional tax tier and how to engage it, the sourcing/override convention for defaults, and the sizing tradeoff of the two output modes. An agent has enough to call it correctly.

Complex tools with many parameters or behaviors need more documentation. Simple tools need less. This dimension scales expectations accordingly.

Parameters3/5

Does the description clarify parameter syntax, constraints, interactions, or defaults beyond what the schema provides?

Schema description coverage is 100%, so the schema already documents every parameter, including defaults, ranges and the output enum. The description repeats the output='summary'/'inline' distinction and notes required inputs, adding little beyond what is already in the structured fields.

Input schemas describe structure but not intent. Descriptions should explain non-obvious parameter relationships and valid value ranges.

Purpose5/5

Does the description clearly state what the tool does and how it differs from similar tools?

States a specific verb and resource ('Deterministic rent-vs-buy decision model') and enumerates what it produces (breakeven month, per-horizon net-worth comparison, year-by-year series). It then explicitly names the sibling tools it should not be confused with, so an agent can disambiguate without opening any schema.

Agents choose between tools based on descriptions. A clear purpose with a specific verb and resource helps agents select the right tool.

Usage Guidelines5/5

Does the description explain when to use this tool, when not to, or what alternatives exist?

Gives an explicit routing rule: 'Pick this for the buy-vs-rent tenure decision; pick compare_mortgage_terms when you are already buying... compare_payoff_strategies to order credit-card payoff, and compare_payoff_vs_invest to weigh extra debt payments against investing.' It also states the usage mode for the heavy payload via output='summary' vs 'inline'.

Agents often have multiple tools that could apply. Explicit usage guidance like "use X instead of Y when Z" prevents misuse.

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