To Rent or To Buy?

October 17th, 2013

House For Sale

To rent or to buy is an old question with varied answers. The answer depends on your ability to come up with a down payment, your ability to commit to a specific area, your creditworthiness, and much more. Those are questions for each individual to answer. But there is interesting math related to how much rent costs, that should be reviewed in helping you determine your answer.

Check the chart below to see how rent payments add up over time.

You can see that over a short period of time your rent equals a nice down payment. And over a long period of time, it can easily equal the entire cost of a home. Owning a home is great for tax breaks, for having something that lasts, something you can renovate and change as you please. And it creates the pride of home ownership.

Renting can be better

Renting may be advantageous for your situation, since there are no maintenance or repair obligations. And you can move as you please to a new location with no costs or hassle. However, look at the money you spend on rent over time simply to have a roof over your head! Everyone should consider buying versus renting for their own needs and situation. Think of the economics of it by using the numbers below.


Monthly rent 3 years 10 years 15 years 30 years
$500 $18,000 $60,000 $90,000 $180,000
$600 $21,600 $72,000 $108,000 $216,000
$700 $25,200 $84,000 $126,000 $252,000
$800 $28,800 $96,000 $144,000 $288,000
$900 $32,400 $108,000 $162,000 $324,000
$1,000 $36,000 $120,000 $180,000 $360,000
$1,250 $45,000 $150,000 $225,000 $450,000
$1,500 $54,000 $180,000 $270,000 $540,000
$1,750 $63,000 $210,000 $315,000 $630,000
$2,000 $72,000 $240,000 $360,000 $720,000
$2,250 $81,000 $270,000 $405,000 $810,000
$2,750 $99,000 $330,000 $495,000 $990,000
$3,000 $108,000 $360,000 $540,000 $1,080,000

You can also compare different scenarios by using the Rent vs. Buy Calculator tool.

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Brian Martucci is a loan officer for Capital Bank Home Loans, a division of Capital Bank, N.A. He has been in the mortgage industry since 1986 and has served in a number of roles, including loan processor, loan officer, mortgage broker, branch manager, and vice president. Brian Martucci – NMLS# 185421. His opinions do not necessarily reflect the opinions and beliefs of Capital Bank Home Loans or Capital Bank. Capital Bank, N.A.- NMLS# 401599. Click here for the Capital Bank, N.A. “Privacy Policy”.

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