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Rent or Buy Calculator

Updated: Jan 20

Among real estate-related calculators, one of the most difficult to accurately determine is the rent vs buy calculator, despite tremendous progress among calculators in this regard over the years. Below I'll go through a relatively typical example for Newport News using Nerdwallet's calculator on the subject. If you don't like Nerdwallet's, Realtor.com has one, as does the New York Times, although there's a subscription wall with New York Times you may encounter. The most important element of these calculators is to ensure that all details are accurate prior to making a determination based on the calculator. It's also important to keep in mind the wide variety of exceptions that can throw these calculators off that I mention on my rent or buy page. Generally speaking, the higher the amount of down payment/closing cost assistance you can freely receive while maintaining low interest rates, and the longer that you are going to own a property, the more that purchasing makes sense. If you don't get higher returns in investments than current mortgage interest rates, typically higher down payments will also reduce the time it would take to break even. If you buy a home, make no changes, and sell within a short time without rapid market appreciation during that time, you'll typically be taking a loss if you acquired the property at fair market value.

1. Determine the monthly price of rent vs the monthly price of a comparable purchase.

1. Example: Comparison of median rented price vs median sold price $268,870 v $1595 for 3 bed 2 bath with a garage in Newport News

2. Determine your interest rate if not provided by your lender already

3. Plug in home price, city, comparable rent price, interest rate, loan term, and your downpayment into the calculator if not wanting to get too granular.

4. More options for higher accuracy


Image courtesy Nerdwallet


Same #s, except with 20% down:


Image courtesy Nerdwallet


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