How would a monthly mortgage payment compare to your rent payment?
You think you're ready to buy your first house, but you're not sure if it's worth the investment? Our rent vs. buy calculator will tell you which option will result in lower monthly payments over a month, a year, seven years, and 15 years.
Once you get your results, don't forget to think about other costs associated with renting and buying--like insurance, the cost of moving frequently if you rent, or home repairs if you buy. You should also remember that your mortgage will be a fixed cost where rent could potentially go up in your area.
Can you pay more?
While you'll never pay less on your monthly mortgage, it is possible to pay more each month. For example, if your mortgage is cheaper than your rent, you could continue to pay the same housing costs to reduce the length of your mortgage. This will help you pay off your mortgage more quickly and pay less in interest over time. You can do this monthly or whenever you have a windfall, like a bonus at work or a gift from family.
What else to consider
Think about your longterm plan for where you live. If you think you'll be moving out of the area in a year or two, buying might be more of a headache than renting. But if you plan on putting down roots, maybe even having a family, then buying might be a good option. Your personal preference can play a part too. Some folks love the flexibility of renting where others love the stability of owning.
You should also remember to factor in other one-time fees for buying a home, like closing costs and realtor fees.
Think you're ready to take the plunge? Check out our first-time home buyer section for some great tips.