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Rent vs. Buy
Compare the estimated costs of renting and buying over your expected time in the home.
Renting
Buying
Paid upfront in cash.
Of estimated sale price.
How long you expect to stay in the home.
Estimated costs over 7 years
Total rent paid
$182,038
Net cost of buying
$157,340
Cash out minus net sale proceeds
- Upfront cash (down payment + buying costs)
- $42,250
- Monthly principal & interest
- $1,848.80
- Total buying cash outflow
- $268,599
- Estimated home value at sale
- $399,709
- Less selling costs
- -$23,983
- Less remaining mortgage balance
- -$264,468
- Estimated net sale proceeds
- $111,259
With these assumptions, the estimated net cost of buying is $24,698 lower than renting over this timeframe. Results shift with your timeframe, appreciation, and costs; this is one input to your decision, not a verdict.
Assumptions in this comparison
- Fixed-rate mortgage; first payment date is payment #1. P&I ends when the loan is paid off.
- Rent increases on each 12-month anniversary; appreciation compounds annually with fractional-year growth.
- Taxes, insurance, HOA and annual maintenance dollars are held constant and continue after mortgage payoff.
- Buying costs are cash paid upfront, not financed. Selling costs are a percentage of estimated sale value.
- Buying net cost is down payment + buying costs + ongoing cash outflows minus net sale proceeds after selling costs and remaining mortgage debt.
- No investment opportunity-cost, tax deduction, rent deposit, utility, moving, refinancing, or mortgage insurance model is included.
- This compares estimated cashflows, not which option is right for you; no automatic winner is selected.
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Review My Numbers With ShelbyEducational estimates only, not a preapproval, loan offer, or credit decision. Actual costs and loan terms may differ.