How to use the rent escalation lease calculator
- Enter the starting monthly rent and the lease term in months.
- Choose whether the rent rises by a percent or by a dollar amount, and enter the size of each increase.
- Set the months between increases. For a yearly increase that is 12.
- Optionally enter free rent months at the start of the lease, and read the schedule, the total and the average month.
Formula
steps in month k = floor((k - 1) / months between increases)
percent increases: rent = start x (1 + increase / 100)^steps
dollar increases: rent = start + increase x steps
total = sum of the rent in every month after the free months
The last block of months can be shorter than the others, so only the months that fall in it are counted. The average divides the total by every month in the term, including free months.
A five year lease with 3 percent increases
A lease starts at $2,000 a month for 60 months, with a 3 percent increase every 12 months. The rent is $2,000.00 in year one, then $2,060.00, $2,121.80, $2,185.45 and $2,251.02. The total paid is $127,419.26, an average of $2,123.65 a month. Without any increase the total would be $120,000.00, so the increases add $7,419.26.
With fixed $50 steps the rent rises to $2,200 by the last year and the total is $126,000.00. A 36 month lease with 3 percent increases and two free months at the start costs $70,181.60, an average of $1,949.49 over all 36 months.
Percent or dollar increases
Percent increases compound, so each step is larger than the one before. Dollar steps add the same amount each time, which grows more slowly over a long lease. Leases may also tie increases to an index or cap them, which this page does not model, so use it for the schedule your lease actually states.
Comparing leases
The average monthly rent over the term is a better number to compare than the starting rent, because it includes free months and later increases. For concessions such as free months and credits, use the Net Effective Rent Calculator. For one increase on its own, see the Rent Increase Calculator, and to judge whether the rent fits your income, try the Rent Affordability Calculator.
Assumptions and limits
- Increases take effect at the start of each block of months, counted from the first month of the lease.
- Free rent months are counted from the first month and do not delay the first increase.
- Rent is the same in every month inside a block.
- Utilities, fees, deposits and taxes are not included.
- The increase and starting rent shown when the page opens are examples.
Frequently asked questions
When does the first increase apply?
After the number of months you enter between increases. With 12 months, months 1 to 12 pay the starting rent and month 13 pays the first increased rent.
Do free months change when increases start?
No. Free months are counted inside the term and do not shift the schedule. If your lease starts increases after the free period instead, enter the rent you will actually pay.
Why is the average month not the starting rent?
The average spreads the total over every month of the term, so it includes the later, higher rents and any free months. It is the cost of one average month over the whole lease.
What if the term is not a whole number of years?
The last block is shorter. A 30 month lease with yearly increases has 12 months at the starting rent, 12 at the next rent and 6 at the third rent.