Calculators
Rent vs Buy Payments Calculator

To rent, or to buy, that is the question. And only you can answer that for yourself. However, our free rent vs. buy calculator can help you make a more informed decision.

We’ll calculate how your costs associated with renting each month compares to the estimated cost of buying a home. You punch in the numbers and we’ll do the math.

 

Should you buy or should you rent? Only you can answer that question, but our Rent vs Buy Calculator will help you make this important financial decision. We’ll take the important costs associated with renting each month and compare with the complexity of buying a home, so you know which decision is best based on your situation.

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What is an amount you’re comfortable paying for a home?

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You can enter a dollar amount or percentage. Some programs allow down payments as low as 3%. Just remember, the more you put down, the less your payment will be.

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We’re using the current average mortgage rate to calculate payments. Your actual rate may vary depending on credit score, loan type and other factors.

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How much per month are you paying for rent?

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Average annual premium insurance typically costs between $300 and $1,000. For a more precise estimate, divide your home cost by 1,000 and multiply by $3.50.

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Utilities costs may include electricity, water, gas, internet and more. Estimate how much you would spend in utilities and enter that number here.

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HOA fees can run between $20 and $400 per month. If you’re interested in purchasing a home with an HOA/Condo fee, enter that monthly cost here.

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Maintenance costs can vary year to year. Setting aside 1% of your home purchase price is recommended.

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Property taxes may vary based on the county your home resides in. You can calculate property tax by dividing the county’s tax rate with the target cost of your home.

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The average cost for renter’s insurance is between $10 and $15 per month.

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Annual rent increases vary based on location, landlord and the area’s supply and demand.

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Utilities costs may include electricity, water, gas, internet and more. Estimate how much you would spend in utilities and enter that number here.

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We entered the current average home price increase percentage in America. You can change to any percentage to compare costs between 1% and 10%.

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Taxpayers may pay anywhere between 10% and 39.6% income tax depending on which tax bracket they fall under. This box is currently shows the average of all income tax rate brackets.

Here is your estimated costs of renting vs buying based on the numbers you provided. Want to see more options? Just enter new numbers to calculate and compare.

 
Renting Costs
$1,257
per month
Buying Cost
per month
CALCULATE

These calculations are tools for learning more about the mortgage process and are for educational/estimation purposes only. Payment shown does not include taxes, insurance, or mortgage insurance (if applicable). This does not constitute an offer or approval of credit. Contact a PrimeLending home loan officer for actual estimates.

For example, a Conventional fixed rate loan with the terms purchase price of $312,500, on a loan term of 360 months, down payment of 20%, and an interest rate of 6.5%, will result in an annual percentage rate of 6.598% with $3,613 in APR fees. Rate pulled 09/02/22, rates change daily. Loans are subject to borrower qualifications, including income, property evaluation, and final credit approval.

TO START YOUR JOURNEY HOME CONNECT WITH AN EXPERT TODAY

SHOULD I RENT OR BUY A HOME?

Choosing to leave renting behind and buy a home is a big life step. If you find yourself wondering, ‘should I rent or own a home?’ you have come to the right place. Comparing the cost of renting vs. buying a home is the first step to knowing what’s right for you.

If your apartment is starting to feel small or you wish you could customize the home you are renting, you may be ready to buy a home. By trading in renting for buying, you have the opportunity to make your home truly your own whether it’s painting your house pink, putting in fresh carpeting, or creating your dream kitchen.

Other pros of buying your home over renting is that you can build equity. What is home equity? It’s the difference between the current market value of your home and what you have left of your mortgage. For instance, if your home is worth $350,000 and you still owe $250,000 on your mortgage, the equity of your home is $100,000. With renting, your money goes straight to your landlord or management company leaving you without the opportunity to invest in the property you reside in. When you trade renting for buying you can build home equity by making a larger down payment, paying your mortgage off early, or making biweekly payments, among other equity building methods.

Wondering if renting is cheaper than buying? You’re not alone. Many people do a cost comparison of renting vs. buying before they start their home search. To get a month-by-month comparison, add up your monthly cost of living while renting and your projected monthly cost of living once you buy a home. Here’s a side-by-side breakdown of a few of the possible monthly costs associated with renting and buying:

Renting

  • Rent payment
  • Utilities
  • Renter's insurance

Buying

  • Mortgage payment
  • Utilities
  • Monthly HOA or condo fees

Both renting and buying can pose additional costs that the other option doesn’t have. For instance, some apartments have amenity fees and garage space rental fees while owning your home means you don’t have to pay extra for your parking space or resident lounge. On the other hand, when you buy a home, you are in charge of the maintenance costs while renters have maintenance crews to fix any issues. Knowing if renting is cheaper than buying a home, or vice versa, really comes down to your budget and the housing market in your area.

IS BUYING A HOUSE A GOOD INVESTMENT?

Buying a home is a great investment, however it’s up to you to turn that investment into an asset. One of the benefits of being a homeowner is building equity, which can make your decision to buy a home a good investment. As you pay down your mortgage principal, you will gain equity in your home. In the future, you can access this equity to use any way you please, such as to consolidate debt, make home renovations, education costs, etc.

In addition to investing equity into your home, you may also receive tax advantages* as a homeowner. When tax season comes around, you can deduct your monthly mortgage interest payments as well as your property taxes.

There are more than just monetary investments to be made in home—you can also make emotional investments in a home. From hosting dinner parties and celebrating holidays to family movie nights and more, a home is where memories are made. When you invest in buying a home, you are also investing in your future.

* PrimeLending is not authorized to give tax advice. Please consult your tax adviser for tax advice for your specific situation.