Rent vs buy checklist

Rent vs buy inputs to verify

• Holding period (time horizon).
• Mortgage rate, down payment, and closing/selling costs.
• Rent growth and home appreciation assumptions.
• Maintenance, taxes, insurance, HOA, and investment return.

Core inputs to gather

• Monthly rent for a comparable unit (with any concessions adjusted).
• Expected holding period (years you plan to stay).
• Home price, down payment, and mortgage rate quote.
• Property taxes, insurance, HOA, and maintenance assumptions.
• Closing and selling costs for your market.
• Rent growth, home appreciation, and investment return assumptions.

Mortgage payment inputs

• Use the note rate, not APR, for principal and interest.
• Convert annual taxes and insurance into monthly amounts.
• Add HOA dues and PMI if they apply.
• Confirm the term you would actually choose (30, 20, 15 years).

Rent assumptions

• Start with a current market rent for a comparable home or apartment.
• Adjust for concessions by lowering effective rent.
• Use a rent growth range (base and conservative scenarios).

Time horizon and transaction costs

• Pick the most likely holding period, not the best case.
• Include buyer closing costs and seller costs separately.
• Short horizons are sensitive to these costs, so test higher values.

Opportunity cost assumptions

• Decide how you would invest cash not used for a down payment.
• Use an after-tax return assumption if you want more realism.
• Model both conservative and optimistic return scenarios.

How to use the checklist

1. Gather inputs from real quotes and local data sources.
2. Run a base case with conservative assumptions.
3. Change one input at a time to see what moves break-even.
4. Record the assumptions you plan to use long-term.

FAQ

Which assumption matters most?

Holding period, selling costs, and mortgage rate usually move the result the most. Appreciation and rent growth matter more on longer horizons.

Should I use national averages?

Prefer local data whenever possible. Taxes, insurance, and rent trends vary widely by market.

References

• CFPB: What are closing costs?
• CFPB: What is a Loan Estimate?

Next steps

Educational use only. Not financial advice.

Last updated: 2026-02-17