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Craig Kuepker, REALTOR®Skogman Realty
Rent vs. Buy

Your rent goes up every year. A mortgage doesn't.

Change the numbers below to match your situation. You'll see what a house actually costs each month, how that compares to renting, and how much of it becomes yours over time. Nothing is saved and nothing is sent unless you ask me to look at it.

The house

$
%
%
—

Owning costs

$
$
$
Under 20% down you'll pay mortgage insurance. It comes off automatically once the loan reaches 78% of the price, and the payment drops that year.

What you pay now

$
% / yr

Looking ahead

% / yr
House payment
—
principal, interest, taxes, insurance
Versus your rent
—
per month, today
Yours in 10 years
—
the part of the house you own
Ahead of renting
—
when buying wins

—

What the payment is made of
Loan principal and interest—
Property taxes—
Home insurance—
Mortgage insurance—
HOA dues—
Total house payment—
What it takes to get in
Down payment—
Closing costs, roughly—
Cash to close—
Loan amount—
Renting costs you, over 10 years—
Rent passes your payment in—
Your payment vs. rising rent
Per month, by year
Monthly house payment compared with rent, by year
House payment Rent
What becomes yours
Down payment, loan paid down, and value gained
Equity by year, split into down payment, loan paid down, and value gained
Down payment Loan paid down Value gained

These are estimates built on the numbers you entered. Rates, taxes, and insurance come from your lender and insurer, not from this page. Home values and rents both move, and neither is guaranteed. This assumes no mortgage interest deduction, since most owners take the standard deduction now.

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Questions I get every week.

Is it cheaper to rent or buy around here?

Month to month, renting is usually cheaper at first. Owning tends to pull ahead within a few years, because your payment stays roughly flat while rent keeps climbing, and part of every payment goes toward what you own instead of to a landlord. The calculator above shows the year that crossover happens for your numbers.

How much do I actually need for a down payment?

Less than most people think. Conventional loans start around 3 to 5 percent down, FHA at 3.5 percent, and USDA and VA can be zero down if you qualify. Under 20 percent down you'll pay mortgage insurance, which comes off automatically once the loan reaches 78 percent of the purchase price. Plan on closing costs of roughly 2 to 3 percent on top of the down payment.

What's actually in a monthly house payment?

Principal and interest on the loan, property taxes, homeowners insurance, mortgage insurance if you put less than 20 percent down, and HOA dues if the property has them. That's what the calculator adds up. Beyond the payment, budgeting about one percent of the home's value per year for maintenance is a good habit, and the break-even math above already assumes you do.

Numbers look close? Let's talk.

Send me what you just ran and I'll tell you straight whether it holds up in this market, what you'd actually qualify for, and what's on the market right now that fits. No pressure and no obligation, whether you're six weeks or two years out.

Your numbers from the calculator come along with the message, so I can look at the same thing you're looking at.

Not sure what price range to plug in? Work it out first with the Iowa affordability calculator.