Rent or Buy?

The choice between buying a home and renting one is among the biggest financial decisions that many adults make. But the costs of buying are more varied and complicated than for renting, making it hard to tell which is a better deal. To help you answer this question, our calculator takes the most important costs associated with buying a house and computes the equivalent monthly rent.

Buying a Home

Buying a home may offer several long-term benefits, including the potential to build equity over time. While property values can fluctuate due to local market conditions and property-specific factors, many homeowners view real estate as a long-term investment. However, appreciation is not guaranteed, and values may rise or fall based on economic and housing market trends.

Homeownership also offers greater flexibility to personalize your living space. Whether you're interested in remodeling, explanding, or simply customizing your home, owning your property allows for more freedom than renting.

In some cases, homeowners may be eligible for certain tax benefits, such as the mortgage interest deduction. Eligibility and benefits depend on individual financial situations, so consulting a tax advisor is recommended.

If you choose a fixed-rate mortgage, your monthly principal and interest payments will remain consistent for the life of the loan. This can provide stability in comparison to rent, which may increase over time.

Renting a House

Renting may offer more flexibility and fewer upfront costs than buying a home-especially if you're unsure how long you'll remain in one location. Homeownership typically involves closing costs, property taxes, insurance, and potential real estate agent fees, which may take time to recover depending on market conditions and how long you stay in the home.

Owning a home also means taking full responsibility for maintenance and repairs, which can arise unexpectedly. These may include systems like plumbing, heating, or roofing, and vary widely in cost. While homeowners insurance can help manage certain risks, it does not cover all expenses.

Renters, on the other hand, typically rely on landlords to handle repairs and carry insurance on the property itself. This can offer peace of mind and help avoid large, unplanned expenses.

Additionally, home values and property-related costs (such as taxes and insurance) may fluctuate over time. Market shifts can impact both value of a home and the timing of a potential sale.

Making the Choice

Ultimately, only you can decide whether renting or buying is the right choice for you. However, the above calculator can help you run the numbers to get a strictly economical analysis to help you decide. You'll have to decide the value of being the owner of your own space and having the freedom to make the home your own.

 

Calculator Disclaimer

This calculator is intended for illustrative purposes only and are hypothetical. We do not guarantee the accuracy of any calculation results scenarios. The figures displayed do not constitute an offer, quote, or solicitation of a product or service by AmWest Funding Corp or its affiliates.