Lease vs. Buy Calculator

The lease-versus-buy question is one of the most consequential a business makes about its space, and the naive version — "mortgage versus rent" — is wrong. Owning carries a down payment, closing costs, taxes, insurance, maintenance and the opportunity cost of tied-up capital, but it builds equity and locks in costs. Leasing preserves flexibility and capital but exposes you to escalations and leaves you with nothing at the end.

Lease vs. Buy Calculator models both paths over your holding period and reports which is cheaper, by how much, and at what break-even year. It accounts for loan amortization, property tax, insurance, maintenance, depreciation and mortgage-interest deductions on the buy side, and rent escalations, free rent, tenant improvement allowance and operating pass-throughs on the lease side. A cumulative cost chart shows the two paths crossing. Every input updates the result live.

Underneath the inputs is the context that makes the numbers trustworthy — what the break-even year means, why opportunity cost belongs in the model, how depreciation and deductions work — plus guidance on reading the verdict. Everything runs in your browser; nothing is uploaded.

• Full buy-side model: Purchase price, down payment, loan rate and term, closing costs, property tax, insurance, maintenance, appreciation, selling costs, depreciation and marginal tax rate.
• Full lease-side model: Monthly rent, annual escalation, free-rent months, tenant improvement allowance and operating expense pass-throughs.
• Tax-aware: Mortgage interest, property tax and depreciation deductions on the buy side; rent deduction on the lease side — both at your marginal rate.
• Opportunity cost: Foregone return on the down payment is added to the cost of owning, so capital tie-up is not ignored.
• Net cost & effective monthly: Total net cost of each option plus a per-month figure for apples-to-apples comparison.
• Break-even year: The holding period at which buying becomes cheaper than leasing, found by scanning each year.
• Cumulative cost chart: An SVG line chart of owned vs leased cumulative cost over time, showing exactly where they cross.
• Live updates: Edit any field and the verdict, numbers and chart recompute instantly.
• Export: CSV, JSON or plain text of the full assumption set and results.

1. Fill the buy side. Purchase price, down payment percent, loan rate and term, closing costs, property tax rate, insurance, maintenance percent, appreciation, selling costs, marginal tax rate and depreciation basis.
2. Fill the lease side. Monthly rent, annual escalation, free-rent months, tenant improvement allowance and operating pass-through.
3. Set the horizon. Holding period (years) and the down-payment opportunity return are shared assumptions used by both sides.
4. Read the verdict. The summary shows total cost to own, total cost to lease, which is cheaper, the difference and the break-even year.
5. Study the chart. The cumulative cost lines show where owning pulls ahead of leasing.
6. Export. CSV, JSON or plain text of assumptions and results for your file or advisor.

Example 1 — Short hold favours lease. A 3-year horizon with a 20% down payment usually shows leasing cheaper: the down payment and closing costs are not recovered before you exit, so the break-even year lands beyond the hold.

Example 2 — Long hold favours buy. Stretch the horizon to 12 years with modest appreciation and the owned line crosses below the leased line, because equity builds and rent escalations compound.

Example 3 — High opportunity return. Raise the down-payment investment return and owning gets more expensive, pushing the break-even year further out — capital tied up is a real cost.

Example 4 — Rent escalations bite. A 4% annual rent escalation over a decade can make leasing far pricier than a fixed mortgage, flipping the verdict toward buying.

Example 5 — Tax rate leverage. A higher marginal tax rate increases the value of ownership deductions, narrowing the gap and pulling the break-even year earlier.

• Stop comparing sticker payments: See the true net cost of owning versus leasing over your actual horizon.
• Capture the hidden costs: Opportunity cost, depreciation, escalations and selling costs are all in the model.
• Know your break-even: The year buying overtakes leasing turns a vague debate into a decision rule.
• Visualize the cross: The cumulative chart shows exactly when the two paths diverge.
• Tax-aware from the start: Deductions on both sides are included, not hand-waved.
• Free and private: No account, no watermark, nothing uploaded.