Home ownership is a big responsibility — likely the most expensive purchase most of us will ever make. Consider your situation before deciding whether it's best to rent or buy.
Why buy instead of rent?
- Your monthly payments build equity and lead toward home ownership.
- With a fixed-rate mortgage, your monthly principle and interest payments will remain the same for the life of your loan.
- Your mortgage interest may be tax-deductible. (Property taxes and mortgage points may also be deductible; consult your tax advisor.*)1
- If your home increases in value, you could make a profit when you sell.
- A home could be passed on to children or other family members.
- Equity built through home ownership can be used to finance educational expenses, home-improvement projects, small-business startup costs or other needs.
- You can usually/typically make changes or improvements at will.
- A landlord can't decide to sell your house and force you to move.
Why rent instead of buy?
- Monthly payments may be lower than mortgage payments. Use our rent vs. buy calculator to determine what your mortgage payments may be.
- Compared with a mortgage, a lease is a shorter-term commitment.
- Someone else typically performs (and pays for) repairs.
- Rent payments may cover appliances, furniture, utilities and even cable/internet.
- No down payment or loan closing costs are required to start renting.
- It's easier to sign a lease than to get approved for a mortgage.
- There's no investment risk if the housing market changes.
- You may be able to avoid home insurance premiums or association fees.