Renting vs. Buying: How to Decide

December 27, 2025

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While buying a house can set you up for financial success, renting comes with its own benefits, like flexibility.
Think about whether it’s the right time in your life to buy, especially considering mortgage rates and home prices.
If you can’t afford a down payment or monthly payments, you may want to continue renting for now.
Buying a home can be a great way to build long-term wealth. But the idea that renting is a waste of money is a myth. In fact, sometimes it can be the better choice. There’s no clear right or wrong answer about whether you should buy or rent. The best fit depends on your finances, lifestyle, and several other factors. Understanding the rent vs. buy decision Factors to consider You’ll want to consider many factors when choosing whether to rent or buy. There are financial factors, as well as your long-term goals and plans. (For example, if you travel a lot or aren’t sure you’ll stick with your current job long, putting down roots in a home might not be wise). Current market conditions, such as current mortgage interest rates and home prices, should factor in as well. Financial implications You’ll, of course, want to run the numbers and determine whether renting or buying fits your monthly budget best. But there are other financial elements to think about, too. For instance, do you have the money for a down payment and closing costs ? What about the maintenance and repairs you’ll need to do as a homeowner? You should also consider things like your wealth-building goals (buying a home lets you build equity) and the tax benefits that come with homeownership. If you do move forward with the homebuying process, it’s crucial that you shop around with the best mortgage lenders to find the lowest rate. Don’t assume you’ll qualify for a mortgage with the same exact terms across various lenders. Lifestyle considerations Your lifestyle is important, too. Buying a home means putting down roots and staying put — usually for at least a few years. Homeownership is also more hands-on. You’ll need to take care of the property, make repairs, keep your yard up, and more. If you’re not home much or want a more laid-back style of living, it might not be for you. Finally, there’s your desire to customize your home. As a renter, you likely won’t be able to paint the walls any color you like or upgrade the kitchen cabinets. When you own a home, you can make any changes you like. What are the pros and cons of buying vs. renting? The pros and cons of renting are often the inverse of those for buying. On the plus side, a landlord takes care of repairs, and you have the flexibility to move more easily. However, you have to abide by the landlord’s prices and rules, and you don’t get the financial benefits of building equity or deducting taxes. Here are the pros and cons of buying a house instead of continuing to rent: Pros of buying a house Build equity. As you pay down your mortgage and the home value increases, you’ll gain equity in the house. You can borrow against the equity to finance other big goals. You could also sell the house later, then keep the money or use the profit for a down payment on your next home. Tax benefits. As a homeowner, you’re eligible for tax deductions on paid interest, property taxes, and home improvements when you file taxes each year. Customize your home. Your landlord won’t always approve changes when you rent. But you have the power to update the home when you’re the owner. (Just make sure any big changes are approved by your homeowner’s association, if necessary.) Cons of buying a house Monthly payments could change. “Property taxes can change depending on the market and a lot of other factors that are out of your control,” says Robert Heck, vice president of mortgage at Morty . While your principal and interest payments should stay the same if you have a fixed-rate mortgage , other costs will probably rise. Maintenance. Your landlord takes care of home repairs when you rent. Once you buy a home, you’re responsible for the time and money that go into maintenance. Less flexibility. It’s harder to pick up and move when you own a home than when you rent. You have to list and sell the home, hire a real estate agent, and pay closing costs if you buy a new place. Home value could decrease. “There are situations in which we do see a downturn or a softening of home prices,” says Heck. By the time you move, there’s no guarantee that your home value would increase as much as you expect, which could affect your finances later. How to use the rent vs. buy calculator Comparing the costs of renting and buying is an important step toward making your decision. Here’s how to do that. Inputting your data You’ll need some numbers on hand before you can use a rent vs. buy calculator. First, you’ll need info on the home you’re considering purchasing — things like the price, how much you’ll put down, what type of loan you’ll use, and your estimated home insurance and property tax costs . You’ll also need the rent-side data. This includes your monthly rent, how much it tends to increase each year, your renter’s insurance costs , your deposit, and other fees you might pay. Interpreting the results Once you input in the data, you should be able to accurately compare the costs of renting vs. buying — both now and in the long haul. Some calculators will also tell you how long you’ll need to stay in the home to make buying a home worth it. Adjusting for different scenarios If you’re not quite sure where you’re buying or what rent would look like, you can run several scenarios through the calculator. For example, if you’re considering two different apartments, you could run both rents through or maybe you don’t know how much down payment you should save. In that case, you could try a few different down payment amounts and calculate when the numbers work in your favor. Benefits of using a rent vs. buy calculator Using a rent vs. buy calculator can come with many benefits, including: Clarity on financial impact You’ll get a good idea of just how much money each will cost in the long term and which one is best for your pocketbook and financial goals. Long-term savings analysis You’ll also get to see how much you’d save in the long haul with each option, as well as when homeownership might pay off for you financially. Personalized recommendations Since you can run several scenarios through it, a rent vs. buy calculator can be a good way to zero in on the right move for your specific personal needs. Common mistakes to avoid when deciding to rent or buy It can be hard to determine the right move. To make sure you choose wisely, avoid these common mistakes: Overestimating or underestimating costs The more accurate the data you input is, the more accurate the analysis will be. So, if you don’t know a number, do some research. Check with your appraisal district for the most recent property tax bill on a property you’re considering, or research rent trends in your area. You can also consult a real estate agent for the most up-to-date data. Ignoring future market trends The housing market is always changing, so be sure to think ahead, too. Is the home you’re considering buying in an area where property values are steadily appreciating? Is the area growing? Where are interest rates headed? These should all factor into your decision. Not considering lifestyle changes You’ll need a good pulse on your long-term plans before you make a decision like this. Consider how long you plan to stay in the area (or at your current job) and what the chances of a move are. If you’re not sure or there’s a high chance of you relocating soon, renting may just be the better choice. FAQs on rent vs. buy decisions

How accurate are rent vs. buy calculators?