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The answer depends on the home, the rent, the loan, and how long you stay. Put in real figures for a place you are looking at, pick a number of years, and this works out what owning would cost after you sell, what renting would cost over the same stretch, and which one leaves you further ahead. Every assumption is yours to change.
"Money not spent" means the down payment and closing costs a renter keeps, plus whatever either side saves in a month where it is the cheaper one, growing at this rate; only the earnings count, since the money itself is already in the totals. Set it to 0 to compare cash out of pocket only. Most people no longer itemize, so tax savings default to 0.
Net cost of owning = everything you paid in (down payment, closing costs, every monthly cost) minus what you walk away with when you sell (sale price minus selling costs minus the loan you still owe), minus what any money you set aside earned. Net cost of renting = every rent and insurance payment, minus what your kept-aside money earned (the down payment you never spent, plus any month renting was cheaper). Lower is better; the difference is the "true" gap.
Tell us where to send them. You get an email with a link that reopens this exact scenario, plus a PDF copy, and the download and copy-link buttons unlock on this device for good. One time only.
Owning adds up the down payment and closing costs, then every month's principal and interest, property taxes, insurance, assessments, water and garbage, a maintenance allowance, and mortgage insurance if you put less than 20% down, with the recurring costs rising each year at the rate you set, and for a 2-flat it subtracts the rent the other unit brings in (rising with your rent-increase rate). At the end it sells the home at the appreciated value, subtracts the costs of selling and the remaining loan balance, and gives you back the difference. Renting adds up rent (rising each year) and renter's insurance. If you leave the "money not spent" return above zero, whichever side has cash left over in a given month sets it aside, and the renter also keeps the down payment and closing costs from day one; what those balances earn comes off each side's cost at the end (the balances themselves are already counted in what each side paid, so only the earnings are subtracted). The break-even year is the first year owning's net cost drops below renting's.
Left out on purpose: income taxes beyond the optional itemizing field, the value of stability or flexibility, rent-controlled or below-market situations, and refinancing. It also assumes you would rent the same kind of home you would buy, which is the fair comparison but not always the real one. The defaults for taxes, insurance, water and maintenance are typical Chicago figures for the property type you pick and are only there so the page works before you replace them; the real numbers come from the listing, the tax bill and an insurance quote, and we can get all three for any home you are considering. Use "Save or download these numbers" to email yourself the scenario (with a link that reopens it and a PDF copy) or print it.
We are real estate brokers. We are not lenders, accountants or financial advisors, and this calculator is an educational model, not a recommendation, a rate quote, or tax advice. Every default on this page is an assumption you should replace with your own figures, and every fee in a real transaction is negotiable and varies. Before you decide, put a lender, and if it matters to you an accountant, in front of your actual numbers. We are glad to introduce the ones our clients trust.
Tell us what you are looking at, or what you are paying in rent, and we will run this with the actual taxes, assessments, comparable sales and today's loan quotes, and talk it through with you either way. Half of our renters stay renters for a while, and that is fine.
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