Is it cheaper for you to rent or buy? We'll show you how many years it will take before the cost of buying equals the cost of renting – the breakeven horizon. If you'll stay in your home past the breakeven horizon, consider buying; if you'll move sooner, renting might be a better option.
Loading the chart contentAfter 5 years and 8 months, buying will be cheaper than renting.
Cost: After 3 years, your total cost of homeownership (down payment, mortgage, this number should be from the response of calling taxes, etc.) for a $300,000 home would be $121,844. Your total cost to rent would be $75,475. Renting leaves you with $46,369 in your pocket (including the money you didn't spend on a down payment).
Gain: After 3 years, if you buy, your home will have $55,870 in equity (available to you when you sell). However, if you instead rent and invest your down payment and the other money you save, at a 6% return rate it will earn around $5,578 in 3 years.
Bottom line: Looking at your gross costs, equity and investment potential, it's better for you to buy than rent if you plan to live in your home more than 5 years and 8 months.
