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Rent vs. Buy Calculator: Should You Rent or Buy a Home?

FSB Mortgage

Have Questions Before You Run the Numbers? Talk to a Local FSB Lender First.

Should You Rent or Buy? Compare the Costs

Compare your current rent with the estimated monthly cost of owning a home. See your potential mortgage payment, 10-year costs, and when buying may reach the break-even point.

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20% of home price
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See our current rates
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Automatically calculated at 0.64% of purchase price per year, divided by 12
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Automatically calculated at 1.5% of home value per year, divided by 12
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Automatically calculated at 0.98% of loan amount per year when down payment is less than 20%
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Automatically calculated at 4% of the purchase price
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Estimated mortgage payment

Cost Comparison

Monthly mortgage (P&I) -
Total monthly cost to own -
Current monthly rent -
Break-even point -
10-yr net cost to own -
10-yr cost to rent -

Calculator disclaimer: This calculator provides estimates only and is not a guarantee of rates, terms, or costs. Results are based on the inputs you provide and general assumptions including home appreciation and rent increases. Actual mortgage payments, taxes, insurance, appreciation, and total costs will vary. View full disclosures.

 
Renting or Buying

Should You Rent or Buy a Home?

The right choice depends on more than comparing your rent with a mortgage payment. Look at the full cost of each option. Homeownership can include principal and interest, property taxes, insurance, maintenance, PMI, HOA fees, closing costs, and your down payment. Rent can also increase over time. Your timeline matters too. Buying may take several years to reach break-even. If you expect to move sooner, renting may make more sense. If you plan to stay longer, building equity and home appreciation can change the comparison.

Renting

Lower upfront commitment

Renting may offer more flexibility and typically avoids many of the upfront and ongoing costs that come with owning a home.

Buying

Longer-term ownership potential

Buying involves more upfront costs, but mortgage payments can build equity and home appreciation may affect the long-term comparison.

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Use your own numbers. The rent vs. buy calculator above lets you change your rent, purchase price, down payment, mortgage rate, ownership costs, and future assumptions to see how your comparison changes.

Beyond the Mortgage

What Is the True Monthly Cost of Owning a Home?

Your mortgage payment is only one part of the cost of homeownership.

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Principal and Interest

Your loan amount, mortgage rate, down payment, and loan term determine the principal and interest portion of your payment.

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Property Taxes and Insurance

Property taxes and homeowners insurance add to your monthly housing cost and can change over time.

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PMI, HOA Fees and Maintenance

Private mortgage insurance, association fees, repairs, and routine maintenance may also affect your monthly budget.

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Upfront Homebuying Costs

Your down payment and closing costs affect how much cash you need upfront and how much you ultimately finance.

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Compare the full monthly cost. Look beyond principal and interest when comparing a mortgage with rent. You can also review FSB's current mortgage rates when testing different scenarios.

Compare Your Options

Is It Cheaper to Rent or Buy?

There is no single answer for every household. Your costs, timeline, financing, and assumptions can all change the comparison.

Renting can have lower upfront costs and may offer more flexibility. Buying requires a larger initial investment and additional ownership expenses, but part of each mortgage payment may build equity in the home.

The calculator estimates a break-even point by comparing your cumulative rent with the estimated net cost of owning based on the information and assumptions you enter. This can help you evaluate whether buying a house may make financial sense based on how long you plan to stay.

Renting

Renting may fit your situation when:

  • You may move in the near future.
  • You want more flexibility.
  • You have limited cash available for upfront costs.
  • Comparable rent is substantially lower than the estimated cost of owning.
Buying

Buying may fit your situation when:

  • You plan to stay in the home longer.
  • You can manage the upfront costs comfortably.
  • The ongoing ownership costs fit your monthly budget.
  • The long-term comparison supports homeownership based on your assumptions.
Your Next Step

Ready to Explore Your Homebuying Options?

A calculator can help you compare the numbers. An FSB mortgage lender can help you understand the financing options available for your situation.

Explore Mortgage Options Talk to a Mortgage Lender

Rent vs. Buy Calculator FAQs

Deciding whether to rent or buy involves more than comparing two monthly payments. Learn how the calculator works, what homeownership costs to include, and how to think about your estimated break-even point.

Whether you should rent or buy depends on your monthly housing costs, upfront expenses, how long you plan to stay, and your assumptions about future rent increases and home appreciation. Renting may offer more flexibility and lower upfront costs, while buying can allow you to build equity over time. Use the calculator to compare both options based on your own numbers.

The calculator compares the estimated net cost of buying a home with the cumulative cost of renting over time. For buying, it considers your mortgage payment, property taxes, homeowners insurance, HOA fees, maintenance, PMI, closing costs, and estimated home appreciation. For renting, it uses your monthly rent and expected annual rent increases.

It depends on your situation. Rent, home price, mortgage rate, down payment, ownership costs, and how long you plan to stay can all change the result. Renting may cost less in some shorter-term scenarios, while buying may compare more favorably over a longer period. The calculator lets you adjust these assumptions to compare the estimated costs.

The estimated break-even point is when the cumulative cost of renting reaches the estimated net cost of owning based on the assumptions entered into the calculator. It can help you understand how long you may need to stay in a home before the financial comparison begins to favor buying. Actual results will vary.

Your monthly cost of owning a home can include mortgage principal and interest, property taxes, homeowners insurance, PMI when applicable, HOA fees, and maintenance. You should also consider upfront expenses such as your down payment and closing costs when comparing buying with renting.

There is no set number of years that applies to everyone. Your break-even timeline depends on your purchase price, financing, ownership costs, rent, expected rent increases, and home appreciation assumptions. Use the calculator's estimated break-even point to see how your specific scenario compares.

Your down payment affects your loan amount, monthly mortgage payment, and whether private mortgage insurance may apply. Some mortgage programs allow down payments below 20%, while putting more down generally reduces the amount you need to finance. The right amount depends on your available funds, loan program, and overall financial situation.




Current Rates

Today's Mortgage Rates in Iowa

Current rates for 15-year, 30-year, FHA, VA, and USDA home loans in Iowa.

Term/Type of Loan Interest Rate† Annual Percentage Rate Number of Monthly Payments Monthly Principal Interest Payments2
15-Year Fixed‡ 6.750% 6.876% 180 $1,327.36
30-Year Fixed‡ 7.250% 7.329% 360 $1,023.26
VA Loans 7.000% 7.347% 360 $1,019.41
IFA Loans IFA Rates and Income limits can be found on the IFA Website.

For information about USDA, home construction, or FHA rates, contact FSB's Mortgage department at 319-730-6990 or fill out the form below.

 


Rent vs. Buy Calculator Disclosure

1Must be 18 or older to apply. All loans are subject to credit approval.
2Mortgage payment examples are based on a $150,000 loan with a minimum credit score of 740.  Payment does not include taxes, insurance, or private mortgage insurance, if required as a condition of the loan. Actual terms and payment amounts vary based on each borrower’s unique situation. Other rates, terms and payment options are available.
†All rates are subject to change without notice. Actual rate may be higher based on credit history, occupancy, LTV and loan type. No discount points. The rates provided assume the purpose of the loan is to purchase a single family residence that will be used as a primary residence. FSB is not responsible for typographical errors or omissions.
‡As little as 3% down payment to purchase a home, with a loan amount of $125,000 or less and a credit score over 740.  Contact a mortgage lender to see if you qualify for the HomeReady loan program.
 
Call FSB's Mortgage department for more information: 319-730-6990