Rent vs Buy: is your rent paying someone else's mortgage?

Most rent covers the landlord's mortgage, taxes and insurance, and then some. See roughly what your landlord pays, then compare renting with buying a similar home year by year.

These numbers are estimates only and may not be accurate. They depend on your real interest rate, credit, income and the home's actual taxes and insurance. Contact us for accurate figures; it's free and there's no obligation. The starting interest rate (6.5%) is an example only, not a quote: your rate depends on your credit, loan type, down payment and the market, and can be higher or lower. Change it to see the difference.

Step 1: your rent and your landlord

Your monthly rent ($)

Rent increase per year (%)

What the landlord paid for the home ($) see your county property appraiser site

Landlord's likely mortgage rate (%)

Landlord's estimated monthly cost (20% down)
Allowance for repairs, empty months, management
Left over for the landlord each month

Step 2: buying a similar home

Home price ($)

Down payment (%)

Interest rate (%) example

Years you plan to stay

Property tax (% per year)

Home insurance ($ per year)

HOA dues ($ per month)

Upkeep (% of value per year)

Home value growth (% per year)

Buying costs (% of price)

Selling costs later (% of value)

Year by year

"Net cost of owning" is everything you've paid to own, minus what you'd walk away with if you sold that year.

Year	Monthly rent	Total rent paid	Net cost of owning	Your equity

Worked example

If you pay $2,200 a month and your landlord bought the home for $300,000 with 20% down at 6.5%, their mortgage, taxes and insurance come to roughly $2,050 a month. You are paying their mortgage and building their equity. Buying a similar $330,000 home with 5% down usually overtakes renting within a few years; enter your own numbers to see your break-even point.

Check Down Payment Grants How much can I afford?

What's next?

How much can I afford?A realistic price range in a minute.Go →Check down payment grantsPrograms that may help you buy sooner.Go →Your path to buyingThe steps, in order.Go →

Common questions

Is it better to rent or buy?

It depends mostly on how long you will stay. Buying has upfront costs (down payment, closing costs) and selling costs later, so it usually takes a few years for the equity you build and the home's growth in value to outweigh renting. The longer you stay, the more buying tends to come out ahead.

What is the break-even point?

The year when the total cost of owning, after subtracting the equity you would walk away with if you sold, drops below the total rent you would have paid. Before that year renting is cheaper; after it, buying is.

Is my rent paying my landlord's mortgage?

Usually, yes. Landlords typically set rent to cover their mortgage, taxes, insurance and upkeep, plus a margin. Part of every rent payment builds equity, just in someone else's name. Owning puts that equity in yours.

What does this calculator leave out?

It doesn't include what your down payment might earn if invested instead, tax deductions, or big repairs. It assumes steady price growth and rent increases, which can vary a lot from year to year.

For education and planning only. Approximate estimates; not legal, tax or financial advice. Not a loan offer, approval or commitment to lend. Example rates are for illustration only; rates can change and may not be available at commitment or closing. Rates, terms, taxes, insurance and program rules vary and change; your actual numbers may differ. Mortgage services by Bill McElhill, NMLS #2176490, licensed in Florida, Georgia and Texas.