Frequently Asked Questions
When does buying a home make more financial sense than renting?
Generally, buying wins when you plan to stay in the home for at least 5–7 years, given closing costs, selling costs, and the time needed to build meaningful equity. The breakeven point varies by market — in high-appreciation areas it may be sooner; in stagnant markets it may be much longer.
What is the breakeven point in a rent vs. buy analysis?
The breakeven point is the number of years where the total cost of buying equals the total cost of renting — including equity buildup, opportunity costs, and appreciation. If you sell before breakeven, renting was cheaper. After breakeven, buying comes out ahead.
What closing costs should I budget when buying?
Plan for 2–5% of the home price in closing costs, which include loan origination fees, title insurance, appraisal, and recording fees. On a $400,000 home, that's $8,000–$20,000. These are paid at closing and add to your upfront cost.
How does home appreciation affect the rent vs. buy calculation?
Home appreciation builds equity without ongoing cost — it's "forced savings" via the lender's principal paydown plus market value increases. Historical average is ~3%/year nationally, though markets vary dramatically. Our calculator lets you set your own assumption.
Should I include the federal tax deduction for mortgage interest?
The Tax Cuts and Jobs Act capped the SALT deduction at $10,000 and raised the standard deduction, so fewer homeowners benefit from itemizing. For most, the standard deduction exceeds itemized benefits. Our calculator uses a simplified model; consult a CPA for your specific tax situation.
What maintenance costs should I expect as a homeowner?
The rule of thumb is 1–2% of home value annually for maintenance and repairs. On a $400,000 home, that's $4,000–$8,000 per year. Newer homes and new construction typically run on the lower end; older homes on the higher end.