Depending on how fast prices and rents rise and how long you stay in your home, you may be better off renting rather than buying. Factors that are part of the equation are the difference in monthly rent versus mortgage payment, home value appreciation, annual rent increases, the interest rate you will pay on your loan, your marginal tax rate and the yield you might receive on savings. When looking at these factors, consider the present value of each option. The one with the lower present value will be the better financial choice.
Rent or Buy?
Rent or Buy?
Rent |
Buy |
|---|---|
| $ 745,225 | $ 380,045 |
Over the term of your 30-year evaluation period, you will save $365,180 by buying instead of renting
| Year | Advantage of Buying |
|---|---|
| 1 | $ 8,970 |
| 2 | $ 9,192 |
| 3 | $ 9,416 |
| 4 | $ 9,640 |
| 5 | $ 9,865 |
| 6 | $ 10,092 |
| 7 | $ 10,318 |
| 8 | $ 10,546 |
| 9 | $ 10,773 |
| 10 | $ 11,001 |
| 11 | $ 11,228 |
| 12 | $ 11,455 |
| 13 | $ 11,682 |
| 14 | $ 11,907 |
| 15 | $ 12,132 |
| 16 | $ 12,355 |
| 17 | $ 12,576 |
| 18 | $ 12,794 |
| 19 | $ 13,011 |
| 20 | $ 13,224 |
| 21 | $ 13,434 |
| 22 | $ 13,640 |
| 23 | $ 13,842 |
| 24 | $ 14,040 |
| 25 | $ 14,232 |
| 26 | $ 14,418 |
| 27 | $ 14,598 |
| 28 | $ 14,771 |
| 29 | $ 14,936 |
| 30 | $ 15,092 |
| Year | Cost of Renting | Mortgage Costs | Homeowner Costs | Cost of Equity | Tax Savings | Appreciation | Cost of Buying |
|---|---|---|---|---|---|---|---|
| 1 | $ 18,500 | $ 15,285 | $ 5,050 | $ 240 | $ 3,545 | $ 7,500 | $ 9,530 |
| 2 | $ 18,860 | $ 15,285 | $ 5,176 | $ 410 | $ 3,515 | $ 7,688 | $ 9,668 |
| 3 | $ 19,227 | $ 15,285 | $ 5,306 | $ 585 | $ 3,484 | $ 7,880 | $ 9,812 |
| 4 | $ 19,602 | $ 15,285 | $ 5,438 | $ 766 | $ 3,451 | $ 8,077 | $ 9,962 |
| 5 | $ 19,984 | $ 15,285 | $ 5,574 | $ 953 | $ 3,415 | $ 8,279 | $ 10,118 |
| 6 | $ 20,373 | $ 15,285 | $ 5,714 | $ 1,146 | $ 3,377 | $ 8,486 | $ 10,282 |
| 7 | $ 20,771 | $ 15,285 | $ 5,856 | $ 1,346 | $ 3,337 | $ 8,698 | $ 10,452 |
| 8 | $ 21,176 | $ 15,285 | $ 6,003 | $ 1,553 | $ 3,295 | $ 8,915 | $ 10,631 |
| 9 | $ 21,590 | $ 15,285 | $ 6,153 | $ 1,767 | $ 3,250 | $ 9,138 | $ 10,817 |
| 10 | $ 22,012 | $ 15,285 | $ 6,307 | $ 1,988 | $ 3,202 | $ 9,366 | $ 11,011 |
| 11 | $ 22,442 | $ 15,285 | $ 6,464 | $ 2,216 | $ 3,152 | $ 9,601 | $ 11,214 |
| 12 | $ 22,881 | $ 15,285 | $ 6,626 | $ 2,453 | $ 3,098 | $ 9,841 | $ 11,425 |
| 13 | $ 23,328 | $ 15,285 | $ 6,792 | $ 2,698 | $ 3,041 | $ 10,087 | $ 11,646 |
| 14 | $ 23,785 | $ 15,285 | $ 6,961 | $ 2,951 | $ 2,981 | $ 10,339 | $ 11,878 |
| 15 | $ 24,251 | $ 15,285 | $ 7,136 | $ 3,213 | $ 2,917 | $ 10,597 | $ 12,119 |
| 16 | $ 24,726 | $ 15,285 | $ 7,314 | $ 3,484 | $ 2,850 | $ 10,862 | $ 12,371 |
| 17 | $ 25,210 | $ 15,285 | $ 7,497 | $ 3,765 | $ 2,778 | $ 11,134 | $ 12,635 |
| 18 | $ 25,704 | $ 15,285 | $ 7,684 | $ 4,056 | $ 2,703 | $ 11,412 | $ 12,910 |
| 19 | $ 26,208 | $ 15,285 | $ 7,876 | $ 4,357 | $ 2,623 | $ 11,697 | $ 13,198 |
| 20 | $ 26,723 | $ 15,285 | $ 8,073 | $ 4,668 | $ 2,538 | $ 11,990 | $ 13,498 |
| 21 | $ 27,247 | $ 15,285 | $ 8,275 | $ 4,991 | $ 2,449 | $ 12,290 | $ 13,813 |
| 22 | $ 27,782 | $ 15,285 | $ 8,482 | $ 5,326 | $ 2,354 | $ 12,597 | $ 14,142 |
| 23 | $ 28,328 | $ 15,285 | $ 8,694 | $ 5,672 | $ 2,254 | $ 12,912 | $ 14,485 |
| 24 | $ 28,884 | $ 15,285 | $ 8,911 | $ 6,032 | $ 2,149 | $ 13,235 | $ 14,844 |
| 25 | $ 29,452 | $ 15,285 | $ 9,134 | $ 6,404 | $ 2,037 | $ 13,565 | $ 15,220 |
| 26 | $ 30,031 | $ 15,285 | $ 9,362 | $ 6,790 | $ 1,919 | $ 13,905 | $ 15,613 |
| 27 | $ 30,622 | $ 15,285 | $ 9,596 | $ 7,190 | $ 1,795 | $ 14,252 | $ 16,024 |
| 28 | $ 31,224 | $ 15,285 | $ 9,836 | $ 7,604 | $ 1,664 | $ 14,609 | $ 16,453 |
| 29 | $ 31,838 | $ 15,285 | $ 10,082 | $ 8,034 | $ 1,525 | $ 14,974 | $ 16,903 |
| 30 | $ 32,465 | $ 15,285 | $ 10,334 | $ 8,480 | $ 1,379 | $ 15,348 | $ 17,373 |
This calculator is intended for informational purposes only and is considered an estimate. The accuracy of this calculator is not guaranteed by General Electric Credit Union (GECU). The calculator and its results do not constitute the advice of, or reflect actual products, services, rates, and/or terms available. Nothing contained in the calculator shall constitute an offer or solicitation of a product or service by GECU. This calculator is not intended to offer any tax, legal, financial, or investment advice. Please consult with qualified advisors to discuss your specific needs.