Renting vs Owning

There’s more to comparing the costs of renting vs. owning than the money you pay out each month.

$500,000 Owning vs renting graph

Factors used: $500,000 purchase price, 20% down, $400,000 30-yr. fixed loan at 4%/4.25% APR. Principal & Interest payment = $1909.66, taxes = $520.83/Mo. (1.25% of value), insurance = $120.83/Mo. ($2.90 per $1000 of loan amount) & maintenance = $208.33/Mo. (0.5% of value). Tax deductibility at 28%. Tax savings, principal paid and appreciation averaged over a 5-year period. Always consult with your tax advisor for tax advice specific to your situation. This is not a Good Faith Estimate nor an offer to lend. Rates, prices, taxes, insurance, etc., are subject to change at any time. APR calculations are based on closing costs of 3% of the loan amount. Actual fees can be less.


The choice of renting vs. buying is up to you and your goals and even with numbers like these, some feel that renting is still better.

“Investing in a home is riskier than renting.”

Yes, there is risk, however you need to live somewhere.  Wouldn’t you rather be investing in your own net worth instead of your Landlords?  Studies conducted by the Federal Reserve show that owning can provide a net worth that is from several to hundreds of times higher than that of renters.

“Home values have dropped in recent years.”

Which is a great reason to consider buying now.  With home prices lower than what it has been in the past and having interest rates also lower, it gives you the opportunity to buy your home at the overall best value.

“The tax deductions aren’t worth it.”

Some people benefit from claiming deductions for mortgage interest and real estate taxes. Others find a standard deduction more valuable. Even if you exclude the tax benefit, the real cost of owning can still be less than renting.  Do check with Tax Specialist on this concern.

Appreciation Growth for you or Appreciation Growth for your landlord?

With more or less equal payments, owning provides the advantage in that you’re paying down principal and could be earning appreciation growth in your own home rather than the landlord’s.

Rent vs Buy Interactive Calculator

Are you ready to explore your opportunities in owning your own home?

Karen Jones Banner with Disclosure

AmeriFirst Financial, Inc., 1550 E. McKellips Road, Suite 117, Mesa, AZ  85203 (NMLS # 145368). 1-877-276-1974. Copyright 2018. All Rights Reserved. This is not an offer to enter into an agreement. Not all customers will qualify. Information, rates, and programs are subject to change without prior notice. All products are subject to credit and property approval. Not all products are available in all states or for all loan amounts. Other restrictions and limitations apply. Click Here for Licensing Information. The services provided by Karen Jones are not a condition, nor do they create any obligation for any form of remuneration for any real estate settlement service related to any referral.  The information contained, and the opinions expressed, in this article are not intended to be construed as investment advice. Karen Jones does not guarantee or warrant the accuracy or completeness of the information or opinions contained herein. Nothing herein should be construed as investment advice. You should always conduct your own research and due diligence and obtain professional advice before making any investment decision. Karen Jones will not be liable for any loss or damage caused by your reliance on the information or opinions contained herein.