Rent vs. own calculator
Example numbers are filled in. Change any of them to match the home and the rent you’re looking at.
Renting
Buying with a VA loan ($0 down)
More assumptions
Where your monthly money goes in year one
Money gone for good, year by year
What waiting to buy could cost
Year-by-year numbers
| Year | Rent paid (total) | Owning: money gone | Home value | Loan balance | Your equity |
|---|
Estimate for illustration only. The rate shown is an example, not a current offer. Owning costs include principal and interest, property tax, insurance, HOA, upkeep and the closing costs you enter; the VA funding fee (unless you’re exempt) is added to the loan. “Money gone” for owning subtracts what you’d keep if you sold at the end of each year, after selling costs. Home values and rents can go down as well as up. The calculator doesn’t include tax deductions, a future refinance, or what a renter might earn by investing any monthly difference.
For illustration only. Results are estimates based on the numbers you enter and general assumptions, and may not reflect your situation. This is not a Loan Estimate, pre-approval, rate quote or commitment to lend. Any rate shown is an example, not a current rate or an offer. Your actual eligibility, loan amount, rate, payment and costs depend on your credit, income, property, appraisal and underwriting, and can change without notice. Not all applicants qualify. CrossCountry Mortgage, LLC NMLS #3029. Equal Housing Opportunity. Full disclaimer.
Rent builds your landlord’s equity, not yours
When you rent, the whole check goes to someone else, and it usually goes up every year. When you own, part of every payment pays down your loan, and the home’s value can rise while you live in it. Both become equity: money that’s yours when you sell or refinance.
Owning has costs renting doesn’t, like property tax, insurance, upkeep and the cost of selling someday, so the calculator counts them. It compares the money you never get back on each side, so the result is a fair comparison.
A VA loan tips that comparison toward owning. You can buy with $0 down, so you’re not giving up savings to get in, and there’s no monthly mortgage insurance. With a fixed rate, principal and interest stay the same for 30 years while rent keeps rising.
When is the right time to buy?
- When you’ll stay past the break-even year. If you expect to stay that long, buying is likely the better move. Expecting PCS orders? Many veterans keep the home as a rental and buy again with their remaining VA entitlement.
- When the payment fits your budget. Shirley’s team qualifies VA borrowers on residual income first. Check yours with the affordability calculator.
- Not necessarily when rates are lowest. You buy the home once, but you may be able to refinance later. If rates come down, a VA IRRRL can lower your rate. Meanwhile, every month you wait is another rent check, and prices may keep climbing.
- When your credit is ready. Shirley’s VA purchase loans have no minimum credit score. Not there yet? Get a free credit plan.
How the calculator works
For renting, it adds up every rent payment, rising each year by the increase you enter. For owning, it adds up everything you pay (closing costs, principal and interest, property tax, insurance, HOA dues and upkeep) and subtracts what you’d walk away with if you sold that year: the home’s value after appreciation, minus selling costs, minus what you still owe. The VA funding fee is added to the loan unless you’re exempt. The year owning’s total drops below renting’s is your break-even year.
It’s an estimate. Home values and rents can fall as well as rise, and the calculator doesn’t include tax deductions, a future refinance, or what a renter might earn investing any monthly difference.
Related
Affordability calculator
How much home can I afford?
Open →Mortgage payment calculator
Your full monthly VA payment
Open →VA entitlement calculator
How much is left?
Open →Rent vs. own questions
Is it better to buy than rent?
Over a long enough stay, it usually is, because your payment builds equity and a fixed rate keeps principal and interest from rising while rent does. Over a short stay, the costs of buying and selling can make renting cheaper. The calculator shows the year owning pulls ahead with your own numbers.
How long do I need to stay for buying to make sense?
That’s the break-even year in the calculator. It depends on the price, rate, property tax, and how fast rents and home values rise. With a VA loan there’s no down payment to earn back, which helps it come sooner.
Should I wait for rates to drop before I buy?
Waiting keeps you paying rent, and prices may keep rising. If rates fall after you buy, a VA IRRRL may let you lower your rate. The calculator’s “what waiting could cost” section shows it in dollars. Future rates and prices can’t be predicted.
Does my VA disability rating change the result?
It can. Veterans who receive VA disability compensation don’t pay the VA funding fee, and many states reduce or remove property tax for disabled veterans. Pick those options in the calculator to see the difference.
Is there a minimum credit score for a VA loan?
VA does not set one, and Shirley’s VA purchase and refinance loans have no minimum credit score. VA construction loans start at a 620 minimum, and VA renovation loans require a 600. Not ready yet? Shirley’s team offers a free credit plan.
