Is it cheaper for you to rent or buy? We’ll show you how many years it will take before the cost of buying equals the cost of renting – the breakeven horizon. If you’ll stay in your home past the breakeven horizon, consider buying; if you’ll move sooner, renting might be a better option.
Cost: After 2 years, your total cost of homeownership (down payment, mortgage, taxes, etc.) for a $194,700 home in Grove Park, Durham, NC 27703 would be $80,483. Your total cost to rent would be $37,463. Renting leaves you with $43,020 in your pocket (including the money you didn’t spend on a down payment).
Gain: After 2 years, if you buy, your home will have $64,487 in equity (available to you when you sell). However, if you instead rent and invest your down payment and the other money you save, at a 6% return rate it will earn around $4,518 in 2 years.
Bottom line: Looking at your gross costs, equity and investment potential, it’s better for you to buy than rent if you plan to live in your home more than 2 years and 2 months.
See more at; www.zillow.com/rent-vs-buy-calculator/?