diff --git a/.changeset/have_renewalcost_take_into_account_cost_of_existing_storage.md b/.changeset/have_renewalcost_take_into_account_cost_of_existing_storage.md
new file mode 100644
index 00000000..6badad8c
--- /dev/null
+++ b/.changeset/have_renewalcost_take_into_account_cost_of_existing_storage.md
@@ -0,0 +1,5 @@
+---
+default: patch
+---
+
+# Have RenewalCost take into account cost of existing storage
diff --git a/rhp/v4/rhp.go b/rhp/v4/rhp.go
index 3e454c4d..c39e7212 100644
--- a/rhp/v4/rhp.go
+++ b/rhp/v4/rhp.go
@@ -581,9 +581,10 @@ func ContractCost(cs consensus.State, p HostPrices, fc types.V2FileContract, min
 }
 
 // RenewalCost calculates the cost to the host and renter for renewing a contract.
-func RenewalCost(cs consensus.State, p HostPrices, r types.V2FileContractRenewal, minerFee types.Currency) (renter, host types.Currency) {
-	renter = r.NewContract.RenterOutput.Value.Add(p.ContractPrice).Add(minerFee).Add(cs.V2FileContractTax(r.NewContract)).Sub(r.RenterRollover)
-	host = r.NewContract.TotalCollateral.Sub(r.HostRollover)
+func RenewalCost(cs consensus.State, p HostPrices, r types.V2FileContractRenewal, minerFee types.Currency, prevExpirationHeight uint64) (renter, host types.Currency) {
+	storageCost := p.StoragePrice.Mul64(r.NewContract.Filesize).Mul64(r.NewContract.ExpirationHeight - prevExpirationHeight)
+	renter = r.NewContract.RenterOutput.Value.Add(storageCost).Add(p.ContractPrice).Add(minerFee).Add(cs.V2FileContractTax(r.NewContract)).Sub(r.RenterRollover)
+	host = r.NewContract.HostOutput.Value.Add(r.NewContract.TotalCollateral).Sub(r.HostRollover)
 	return
 }
 
diff --git a/rhp/v4/rhp_test.go b/rhp/v4/rhp_test.go
index ae4f0f00..0204bdb0 100644
--- a/rhp/v4/rhp_test.go
+++ b/rhp/v4/rhp_test.go
@@ -3,6 +3,7 @@ package rhp
 import (
 	"testing"
 
+	"go.sia.tech/core/consensus"
 	"go.sia.tech/core/types"
 )
 
@@ -19,3 +20,119 @@ func TestMinRenterAllowance(t *testing.T) {
 		t.Fatalf("expected %v, got %v", expected, minAllowance)
 	}
 }
+
+func TestRenewalCost(t *testing.T) {
+	// contract for renewal
+	contract := types.V2FileContract{
+		Capacity:         1000 * SectorSize,
+		Filesize:         900 * SectorSize,
+		FileMerkleRoot:   types.Hash256{1, 1, 1},
+		ProofHeight:      500000,        // block 500k
+		ExpirationHeight: 500000 + 1000, // 1000 block window
+		RenterOutput:     types.SiacoinOutput{Value: types.Siacoins(300)},
+		HostOutput:       types.SiacoinOutput{Value: types.Siacoins(400)},
+		MissedHostValue:  types.Siacoins(700),
+		TotalCollateral:  types.Siacoins(100),
+		RevisionNumber:   99999999,
+	}
+
+	cs := consensus.State{}
+	prices := HostPrices{
+		TipHeight:       40000,
+		ContractPrice:   types.NewCurrency64(100),
+		Collateral:      types.NewCurrency64(200),
+		StoragePrice:    types.NewCurrency64(300),
+		IngressPrice:    types.NewCurrency64(400),
+		EgressPrice:     types.NewCurrency64(500),
+		FreeSectorPrice: types.NewCurrency64(600),
+	}
+
+	// renew contract
+	renewal, _ := RenewContract(contract, prices, RPCRenewContractParams{
+		Allowance:   contract.RenterOutput.Value.Add(types.Siacoins(20)), // 20 SC more than renter output
+		Collateral:  contract.MissedHostValue.Add(types.Siacoins(10)),    // 10 SC more than before
+		ProofHeight: contract.ExpirationHeight + 1000,
+	})
+
+	minerFee := types.NewCurrency64(700)
+	prevExpirationHeight := uint64(900) // 100 blocks before
+
+	// assert expected results
+	renter, host := RenewalCost(cs, prices, renewal, minerFee, prevExpirationHeight)
+	expectedRenter := types.NewCurrency(12531552842177053476, 3317658)
+	expectedHost := types.NewCurrency(7783457943256563812, 71557343)
+	if !renter.Equals(expectedRenter) {
+		t.Fatalf("expected %v, got %v", expectedRenter, renter)
+	} else if !host.Equals(expectedHost) {
+		t.Fatalf("expected %v, got %v", expectedHost, host)
+	}
+
+	// make sure the sums match
+	fc := renewal.NewContract
+	inputSum := renter.Add(host)
+	outputSum := fc.RenterOutput.Value.
+		Add(fc.HostOutput.Value).
+		Add(cs.V2FileContractTax(fc)).
+		Add(minerFee)
+	if !inputSum.Equals(outputSum) {
+		t.Fatalf("expected %v, got %v", inputSum, outputSum)
+	}
+}
+
+func TestRefreshCost(t *testing.T) {
+	// contract for renewal
+	contract := types.V2FileContract{
+		Capacity:         1000 * SectorSize,
+		Filesize:         900 * SectorSize,
+		FileMerkleRoot:   types.Hash256{1, 1, 1},
+		ProofHeight:      500000,        // block 500k
+		ExpirationHeight: 500000 + 1000, // 1000 block window
+		RenterOutput:     types.SiacoinOutput{Value: types.Siacoins(300)},
+		HostOutput:       types.SiacoinOutput{Value: types.Siacoins(400)},
+		MissedHostValue:  types.Siacoins(700),
+		TotalCollateral:  types.Siacoins(1000),
+		RevisionNumber:   99999999,
+	}
+
+	cs := consensus.State{}
+	prices := HostPrices{
+		TipHeight:       40000,
+		ContractPrice:   types.NewCurrency64(100),
+		Collateral:      types.NewCurrency64(200),
+		StoragePrice:    types.NewCurrency64(300),
+		IngressPrice:    types.NewCurrency64(400),
+		EgressPrice:     types.NewCurrency64(500),
+		FreeSectorPrice: types.NewCurrency64(600),
+	}
+
+	// renew contract
+	renewal, _ := RefreshContract(contract, prices, RPCRefreshContractParams{
+		Allowance:  contract.RenterOutput.Value.Add(types.Siacoins(20)), // 20 SC more than renter output
+		Collateral: contract.TotalCollateral.Add(types.Siacoins(10)),
+	})
+
+	minerFee := types.NewCurrency64(700)
+
+	// assert expected results
+	renter, host := RefreshCost(cs, prices, renewal, minerFee)
+	expectedRenter := types.NewCurrency(10700203959496213284, 21749095)
+	expectedHost := types.NewCurrency(13106743224624480256, 54752209)
+	if !renter.Equals(expectedRenter) {
+		t.Fatalf("expected %v, got %v", expectedRenter, renter)
+	} else if !host.Equals(expectedHost) {
+		t.Fatalf("expected %v, got %v", expectedHost, host)
+	}
+
+	// make sure the sums match
+	fc := renewal.NewContract
+	inputSum := renter.Add(host)
+	outputSum := fc.RenterOutput.Value.
+		Add(fc.HostOutput.Value).
+		Add(cs.V2FileContractTax(fc)).
+		Add(minerFee).
+		Sub(renewal.RenterRollover).
+		Sub(renewal.HostRollover)
+	if !inputSum.Equals(outputSum) {
+		t.Fatalf("expected %v, got %v", inputSum, outputSum)
+	}
+}