When rent catches up with owning.
Owning usually costs more in year one and less later, because rent keeps rising and the mortgage doesn’t. Find the year it turns for you.
Owning against renting
What owning costs a month
- Principal and interest
- $2,759.10
- Property tax (1.1% a year)
- $458.33
- Insurance (0.35% a year)
- $145.83
- Upkeep (1% a year)
- $416.67
- PMI
- $175.00
- Owning, a month
- $3,954.93
After 12 years
- Home value
- $755,534
- Loan left
- $341,381
- Your equity
- $414,153
- Rent paid by then
- $514,149
- Owning’s costs by then
- $569,511
- Rent a month that year
- $4,304
Year by year
| Year | Rent a month | Equity | Rent paid |
|---|---|---|---|
| 1 | $3,110 | $101,870 | $36,228 |
| 3 | $3,299 | $148,422 | $111,977 |
| 5 | $3,500 | $199,023 | $192,339 |
| 10 | $4,057 | $345,954 | $415,313 |
| 12 | $4,304 | $414,153 | $514,149 |
| 15 | $4,704 | $528,308 | $673,801 |
| 20 | $5,453 | $755,939 | $973,460 |
| 30 | $7,328 | $1,403,397 | $1,723,562 |
How the comparison works
Owning’s monthly cost is principal and interest, property tax (1.1% of the price a year), insurance (0.35%), upkeep (1%) and PMI under 20% down, held at today’s figures. Rent starts at today’s rent and grows each year by the rate you set. The year rent reaches owning’s cost is when buying starts to cost less each month.
Equity is the home’s value, growing by the rate you set, less the loan’s scheduled balance. Rent paid is everything paid in rent before that year.
What this leaves out
Closing costs on the way in and selling costs on the way out (often 6–8% of the price), what the down payment would earn if it stayed invested, tax on the sale, and the mortgage interest deduction. Short stays are where those matter most.
An estimate to plan with, not a Loan Estimate, a pre-approval or advice. Lenders, counties and insurers set the real figures; check them before you act.
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RichDue shows renting and buying against your own rent, savings and income, and what each does to the next 12 months of your plan.