Home buyer tools
Should you rent or buy?
Renting isn’t throwing money away, and buying isn’t always the smarter move. The answer comes down to how long you’ll stay. Put in your numbers and see when buying pulls ahead, even if the answer is to keep renting.
What you’d walk away with
Buying shows your cash after selling the home and paying off the loan. Renting shows what your down payment and monthly savings could grow to.
| If you stay | Buying | Renting | Who’s ahead |
|---|---|---|---|
| 1 year | $10,086 | $41,897 | Renting |
| 3 years | $38,920 | $70,469 | Renting |
| 5 years | $70,145 | $100,074 | Renting |
| 7 years | $103,994 | $130,704 | Renting |
| 10 years | $160,268 | $178,528 | Renting |
| 15 years | $271,312 | $258,043 | Buying |
| 20 years | $409,124 | $339,486 | Buying |
| 30 years | $847,895 | $552,987 | Buying |
These are estimates, not a loan offer or a rate quote. I’m a real estate broker, not a lender. Your actual rate, payment and approval come from a lender after they review your application. Starting values are examples only.
Home values, rents and investment returns are guesses, and home values can fall. This isn’t financial or tax advice. Taxes, insurance, upkeep and HOA dues rise 3% a year here. Mortgage insurance stops once the loan reaches 78% of the price, though some loans keep it longer. Income taxes aren’t included.
How this works
Most rent vs. buy comparisons stop at the monthly payment. That leaves out too much. This one follows two versions of you with the same money.
The buyer pays the down payment and closing costs, then the mortgage, taxes, insurance and upkeep. The renter pays rent and invests that same cash, plus whatever they save each month over the cost of owning.
Then both versions cash out. The buyer sells, pays the selling costs and pays off the loan. The renter counts their savings. Whoever has more is ahead.
Why the first few years favor renting
Buying and selling are expensive. You pay closing costs going in and commissions coming out, and early mortgage payments are mostly interest. It takes time for your equity and the home’s growth to cover those costs.
If you might move in a couple of years, renting is often the better call. I’d rather tell you that now than sell you a house that doesn’t fit your plans.