There are many advantages to buying a home versus renting one. View these advantages below and to the right in the Mortgage Payments calculator along with the additional information below.


Buy vs. Rent         Comparison Chart ADVANTAGES CONSIDERATIONS
BUY Property builds equity Responsible for maintenance
Sense of community, stability, and security Responsible for property taxes
Free to change decor and landscaping Possibility of foreclosure and loss of equity
Not dependent on landlord to maintain property Less mobility than renting

RENT Little or no responsibility for maintenance No tax benefits
Easier to move No equity is built up
No control over rent increases
Possibility of eviction

Savings: Buying

In many cases, the amount of money a renter spends on rent can be about the same as or less than the amount a homeowner spends on a mortgage.  With the tax benefit for homeowners, the savings can be significant.

Monthly Expenses: Buying

Your rental company takes part of your rent payment to cover certain housing expenses.  When you decide to purchase a home, you accept responsibility for paying for these expenses (listed below).  They are additional costs to your monthly mortgage payment and should be included in your budget estimates:  

  • Property Taxes and Special Assessments
  • Home/Hazard Insurance
  • Utilities
  • Maintenance
  • Home Owner Association (HOA) Fee: Doesn’t apply to all purchases. It pays for trash and snow removal and maintenance of common grounds if applicable.
  • Membership Fee: It may pay for recreational facilities and other services (cable TV).

Buy vs. Rent Comparison

The chart below shows a cost comparison for a renter and a homeowner over a seven year period.

  • The renter starts out paying $800 per month with annual increases of 5%
  • The homeowner purchases a home for $110,000 and pays a monthly mortgage of $1,000
  • After 6 years, the homeowner’s payment is lower than the renter’s monthly payment
  • With the tax savings of home ownership, the homeowner’s payment is less than the rental payment after 3 years
Years Rent Payment Mortgage Payment Monthly Difference After Tax Savings Yearly Difference After Tax Savings
1 800 1000 -200 -50 -2400 -600
2 840 1000 -160 -10 -1920 -120
3 882 1000 -118 +32 -1416 +384
4 926 1000 -74 +76 -888 +912
5 972 1000 -28 +122 -336 +1464
6 1021 1000 +21 +171 +252 +2052
7 1072 1000 +72 +222 +864 +2664
8-30     Savings increase every year