Buying versus Renting

There are many advantages to buying a home versus renting one. View these advantages in the below Buy Vs. Rent Comparison Chart, or view a financial comparison of buying versus renting in the Buy Vs. Rent Comparison Chart further down on this page.

Your income, savings, and monthly expenses play an important role in determining how large a mortgage you can afford.

Buy Vs. Rent Comparison Chart

 Savings: Buying

In many cases, the amount of money a renter spends on rent can be about the same as or less than the amount a homeowner spends on a mortgage. With the tax benefit for homeowners, the savings can be significant.

Buy Vs. Rent Comparison
The chart below shows a cost comparison for a renter and a homeowner over a seven-year period.

• The renter starts out paying $800 per month with annual increases of 5%
• The homeowner purchases a home for $110,000 and pays a monthly mortgage of $1,000
• After 6 years, the homeowner's payment is lower than the renter's monthly payment
• With the tax savings of homeownership, the homeowner's payment is less than the rental payment after 3 years

 Monthly Expenses: Buying

Your rental company takes part of your rent payment to cover certain housing expenses. When you decide to purchase a home, you accept responsibility for paying for these expenses (listed below). They are additional costs to your monthly mortgage payment and should be included in your budget estimates:

• Property Taxes and Special Assessments
• Home/Hazard Insurance
• Utilities
• Maintenance
• Home Owner Association (HOA) Fee: Doesn't apply to all purchases. It pays for trash and snow removal and maintenance of common grounds if applicable.

Membership Fee: It may pay for recreational facilities and other services (cable TV).