Renting vs. Buying: Why the Numbers Might Surprise You

Renting vs. Buying: Why the Numbers Might Surprise You

For years, many of us have heard the same message: “Paying rent is throwing money away. You should buy as soon as you can.” Yet when you actually run the numbers in today’s market, the answer isn’t always that simple—and it may even surprise you. In many places, especially with higher home prices and interest rates, renting can be cheaper month‑to‑month, while buying still wins over the long run by building equity and protecting you from rising housing costs.

The Monthly Payment Story Isn’t the Whole Story

When people compare renting vs. buying, they usually start with one question: “What will my monthly payment be?” That’s a good place to start, but it’s not enough on its own.

• Rent typically includes just one main number: your monthly rent, plus maybe utilities.

• A mortgage payment often includes principal, interest, property taxes, homeowner’s insurance, and sometimes mortgage insurance or HOA fees.

In many markets today, the all‑in monthly cost to own a similar home is higher than the cost to rent it. That gap can feel discouraging to would‑be buyers, especially first‑timers who are already stretched by student loans, childcare, or other expenses. But that’s where it helps to look beyond the monthly check and ask: What do I get in return for that payment?

What You’re Really Paying For

When you rent, your monthly payment buys you housing and flexibility—but it doesn’t buy you an ownership stake. Once you move out, you don’t get any of that money back.

When you own, a portion of your monthly payment goes toward principal, which increases your equity in the home over time. At first, especially at higher interest rates, most of your payment goes toward interest, but that balance shifts slowly in your favor the longer you stay.​

On top of that, homeowners can benefit from:

• Potential price appreciation if their local market rises over time

• The ability to lock in a fixed payment with a fixed‑rate mortgage

• Possible tax benefits, depending on their situation and local rules

Renters, on the other hand, avoid big repair bills, property taxes, and most maintenance costs, which can make their monthly budget feel simpler and more predictable in the short term.