December 4, 2023

Buying Home Vs Renting – Use a Mortgage Calculator

4 min read

The decision to rent or buy a home is a complicated one. It comes down to personal preferences, plans and financial resources.

This calculator takes into account both the one-time buying and selling costs, as well as the recurring monthly costs of renting and homeownership.

The results are based on an assumed 20% down payment and current mortgage rates.


When deciding whether to rent or buy, the price of the property is important. If home prices are high, it may make more sense to rent until the market cools. However, if mortgage rates are low, buying may be cheaper.

Another important factor is how long you plan to stay in the area. If you are planning on moving frequently, renting may be a better option. On the other hand, if you plan on staying in your area for a few years or more, buying a home might make sense.

Ultimately, the decision to rent or buy is a personal one. It depends on your finances, lifestyle, and vision for the future. While some people may claim that buying always makes more sense, the reality is that each situation is unique. Be sure to consider all the factors before making a final decision. Our rent vs buy calculator will help you determine which option is best for you.

Down Payment

The amount of money required for a down payment is one of the biggest obstacles to buying a home. If you are putting down less than 20%, you will need to buy private mortgage insurance (PMI).

A mortgage also involves interest, taxes and other upfront costs, which can add up quickly. Using a rent vs buy calculator will help you figure out all of the upfront and ongoing costs associated with homeownership to determine whether or not it makes sense for your specific situation.

When deciding whether to buy or rent, it is important to consider how long you intend to live in the area. If you plan on moving in a few years, renting might make more sense because it offers more flexibility and freedom than owning a house does. However, if you are planning on staying in an area for several years or longer, purchasing a home could make financial sense.

Mortgage Rate

Buying a home requires a significant upfront investment. The mortgage rate you select and your income will determine the size of your monthly payments. A mortgage calculator is a great tool for experimenting with different rates and other variables to see how they affect your ability to afford a home purchase.

The number of years you plan to live in the house will also have a major impact on whether or not it makes sense to buy versus rent. For example, in New York City, a home buyer would have to stay for more than 18 years before buying made financial sense compared to renting, according to SmartAsset.

When you choose to rent, your landlord is responsible for the maintenance and repairs of the property. This can be a huge advantage for people who aren’t interested in spending time or money on DIY projects.

Closing Costs

It’s important to run the numbers before making a big financial decision, such as whether to rent or buy a home. The purchase of a home involves substantial one-time costs that aren’t reflected in monthly mortgage payments, such as real estate taxes and closing fees.

Other factors to consider include the state of the local housing market and your lifestyle. If home prices are too high in your area, it may make more sense to rent until home prices decline. Also, if you’re planning to move soon, it may be better to rent than to pay the high price of buying a house that you might not live in for long.

This calculator will help you determine how many years it will take before buying becomes cheaper than renting. The longer you plan to stay in your home, the more likely it is that buying makes more sense than renting.


Buying a home is a big financial commitment. It requires a large down payment and ongoing mortgage payments. Additionally, you may have to deal with maintenance costs like plumbing repairs, electrical issues, and a new roof. Renting, on the other hand, typically involves fewer expenses and offers more flexibility.

However, your long-term financial goals and current housing market conditions may impact which option is best for you. Buying can be more profitable than renting over the long term because you can reap the benefits of equity and tax deductions.

The calculator takes into account many hidden factors associated with both choices, including interest, property taxes, mortgage insurance, closing costs, opportunity costs, and appreciation. This tool makes it easy to compare these factors and make an informed decision. Some of these costs are one-time fees, while others keep accumulating over time. The calculator also considers the impact of inflation on your mortgage rate.

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