Is It Better to Rent or Buy? Try our Rent or Buy Calculator
Are you thinking about purchasing a home but aren’t sure if it’s the right financial decision for you? Are you wondering, “Is it better to rent or buy a new home?” This Rent or Buy calculator was designed to help you decide which option is best for you. By simply entering your personal information below, you’ll be able to finally decide which is better for you: purchasing a new home or renting.
The rent or buy calculator is easy-to-use and simple to understand. First, you’ll want to choose a period of time with which to compare. Saving money by buying a home rather than renting one can be seen as a marathon, not a sprint. The longer you plan to be in your home, the more likely that owning is going to save you money.
Then input the cost of your monthly rent along with the monthly cost of your renter’s insurance – both those numbers should be easy enough. However, as you likely know, the cost of renting a home tends to go up annually, usually in the neighborhood of 2% to 5%.
It’s hard to know exactly how much your rent will increase in any given year so. If you’ve been renting the same home for a while, your previous rental increases should give you a reasonable place to start. If not, then do your best to estimate based on the local rental market.
Now, you’ll want to input into the rent or buy calculator the details of a prospective house you’d expect to purchase. This includes the initial purchase price, loan amount for your mortgage, mortgage term in years, interest rate, as well as yearly property taxes and property insurances.
The rent or buy calculator takes all this into account and tells you how much you’d save over that set period of time by renting or owning. Try it out with your own circumstances – is it better to rent or buy?