How the Rent vs. Buy Comparison Works
The calculator projects rent using the starting monthly rent and annual rent-growth assumption. For buying, it estimates fixed-rate mortgage amortization, property taxes, insurance, HOA dues, PMI, maintenance, purchase costs, projected home value, remaining mortgage balance, and selling costs.
To compare the two options at the end of the selected period, the calculator assumes the home is sold. Estimated net sale proceeds are deducted from total homeowner cash outflows to calculate the estimated net cost of buying.
The result is highly sensitive to the assumptions entered. Home values and rents may increase or decrease, ownership expenses may change, and actual mortgage terms depend on the borrower, property, loan program, and market conditions.
What Can Change the Result?
The length of time in the home can have a major effect because buying includes upfront purchase costs and potential selling costs. Rent increases, interest rate, down payment, property taxes, insurance, maintenance, HOA dues, PMI, purchase costs, selling costs, and home appreciation or depreciation can also move the comparison.
Changing only one assumption can shift the break-even estimate. Use the calculator to test several realistic scenarios rather than relying on one set of numbers.
Rent vs. Buy Planning in Maryland, Virginia, and Washington, DC
Local property taxes, insurance costs, HOA dues, home prices, and rents can vary throughout Maryland, Northern Virginia, and Washington, DC. For payment planning, compare this estimate with the Mortgage Calculator and the Affordability Calculator.
TopOne Mortgage can also help you compare loan programs and review whether buying, waiting, or adjusting the price range may fit your goals. Contact TopOne Mortgage when you are ready to discuss a specific scenario.
