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Should you rent or buy?

Are you wondering whether it’s smarter to keep renting or buy a home? Our Rent vs. Buy Calculator can give you a clearer picture of which housing situation could make the most financial sense for you.

Paying monthly rent can be frustrating. Sometimes, though, renting is the most realistic option as you work toward things like building a nest egg or landing on more stable financial ground. There are other benefits to renting, too. You typically don’t have to worry about maintenance or repair costs on the property, relocating can be easier when you rent, and you don’t have to pay property taxes. But when interest rates are low, it’s worth considering if the cost of renting may, in fact, be greater than owning a home.

Sure, there are upfront costs when you buy a home, things like property taxes, closing costs, and homeowners insurance, but over time, you get those costs back in the form of equity. Your break-even point is when the long-run cost of renting outweighs the upfront costs of buying. Our calculator assumes a 30-year, fixed-rate loan, and will show you how many years it will take for you to break even. And remember, with a fixed rate, your monthly payments will never increase, like your rent always seems to.

Comparing renting to buying may seem difficult at first glance, but that’s where our Rent vs. Buy Calculator will help. Plug in your monthly rent and then play with different buying scenarios. Or enter varying rent and purchase costs to see how payments change and how long it will take to break even. The calculator helps you understand what you may be able to afford and if buying makes financial sense right now and in the long run.

Let’s not forget the many benefits of owning a home — one of which is freedom. Want to knock down a wall, paint a mural in your child’s bedroom, or get a puppy? When you own your home, there’s no one to stop you. Other advantages to owning include tax deductions, the annual appreciation rate, long-term capital gains, and you’re actually paying less over the life of your loan. Not to mention another huge plus — you’re building equity in your home.

Rent vs. Buy

Calculators are provided for illustrative purposes only. Not a commitment to lend. Other fees may apply.
Break Even in
Year
Avg. Monthly Rent Cost
Total Cost to Own
Avg. Monthly Cost to Own
Total Cost to Rent

30-Year Fixed-Rate Purchase Mortgage Example:
The payment on a $225,000 30-year fixed-rate purchase loan at 3.250% with a 70% loan-to-value (LTV) is $929.22 with 0 points due at closing. The Annual Percentage Rate (APR) is 3.333%. This assumes a FICO score of at least 701. Payment does not include taxes and insurance premiums, which will result in a higher monthly payment. Interest rates and annual percentage rates (APRs) are based on current market rates and are subject to change without notice. Rates offered may be subject to pricing add-ons related to property type, loan amount, LTV, credit score, and other variables. Mortgage insurance may be required for LTV >80%. If mortgage insurance is required, the mortgage insurance may increase the APR and the monthly payment. Stated rate may change or not be available at the time of loan commitment or lock-in.

15-Year Fixed-Rate Conforming Purchase Mortgage Example:
The payment on a $225,000 15-year fixed-rate conforming purchase loan at 2.750% with a 70% loan-to-value (LTV) is $1526.90 with 0 points due at closing. The Annual Percentage Rate (APR) is 2.899%. This assumes a FICO score of at least 701. Payment does not include taxes and insurance premiums, which will result in a higher monthly payment. Interest rates and annual percentage rates (APRs) are based on current market rates and are subject to change without notice. Rates offered may be subject to pricing add-ons related to property type, loan amount, LTV, credit score, and other variables. Mortgage insurance may be required for LTV >80%. If mortgage insurance is required, the mortgage insurance may increase the APR and the monthly payment. Stated rate may change or not be available at the time of loan commitment or lock-in.