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Should you rent or buy? The age-old question revisited

Whether to rent or buy your home is an age-old question we’re always trying to answer in personal finance. You might be at a place in your life when you’re financially stable and prepared for homeownership… but is it the wisest financial move for you?

In many cases, buying a home gives you a lot of perks you won’t get as a renter, including autonomy, ownership and equity you may leverage for other financial goals. But it’s not necessarily the right move for everyone. Here are a few things to consider as you decide whether to rent or buy.

Questions to Ask Yourself to Decide Whether to Rent or Buy

When considering whether to rent or buy, ask yourself these questions about your finances and future plans:

  • How much do you have saved that you could put toward a home down payment (the percentage of a home’s price that you pay upfront and don’t have to include in what you borrow for the mortgage)?
  • How much of a home loan could you afford? (Our mortgage affordability calculator may help you figure it out.) How does that compare with median home prices in your area?
  • Do you move often or plan to move again soon?
  • Are you interested in earning income by renting out to others?
  • Do you enjoy home maintenance, decorating, remodeling, landscaping or gardening?

Your answers to these questions don’t necessarily mean one or the other is the best move for you. They give you information that may help you make the decision.

When It Makes More Sense to Rent than to Buy

Renting may be a good option for some individuals and families, because it comes with a much lower barrier to entry than buying a home.

As a renter, you typically only have to save up a month’s rent plus around the same amount in a security deposit to get into a house or apartment. That might be $2,000 or $3,000 at most, depending on where you live. Even if you’re a high earner with a healthy savings account, renting might pay off if you’re in a dense city with high home prices.

Use our Rent or Buy Calculator to compare renting versus buying options in your area — it can show you how much you may save over 30 years with one option or the other.

Renting might make more sense for you if:

  • You live in a high-cost-of-living area where home values are soaring.
  • You live in a densely populated city where home supply lags behind demand.
  • You haven’t saved enough for a 20% down payment to avoid mortgage insurance.
  • Your credit score is too low to qualify for a mortgage without exorbitant terms.
  • You don’t want the responsibility of maintaining a property.
  • You like to move often or anticipate having to relocate periodically for work or personal reasons

Note: If you’re sticking with renting and hesitant to explore homeownership because you’re concerned about qualifying for a mortgage, look into options for non-conventional loans, like Quontic’s Non-Traditional Mortgages for self-employed individuals and others with non-traditional income. A mortgage isn’t necessarily out of your reach.

When It Makes More Sense to Buy than to Rent

The greatest drawback of renting instead of buying a home is that the monthly payments you make as a renter don’t build equity you can own.

Whether you rent for a month or 30 years, you’re in the same position at the end of each month in terms of having spent money to have a place to live. The difference with owning, however, is that at any point in owning your home, you may sell it, often for a profit. You may even stay in your home and take advantage of the equity you’ve built through mortgage payments by taking out a home equity line of credit or loan to help you achieve additional goals.

Plus, when you own a home, you have control over what to do with the property. You may remodel and change the landscaping all you want to suit your needs and aesthetics. As a renter, you’re stuck with the owner’s preferences.

Buying might make more sense for you if:

  • You live in a low-cost-of-living area where you may get a mortgage for as little as typical monthly rent.
  • You live in an area with population growth, where the value of property is rising steadily.
  • You’ve saved enough for a 20% down payment or more, so you’ll avoid mortgage insurance and reduce the amount of debt you have to take on.
  • You don’t have the savings or credit score for a conventional mortgage, but you could qualify for a government-backed loan, like an FHA loan, a USDA loan or a VA loan, or a non-conventional loan, like one of Quontic’s various mortgage offerings.
  • You want to invest in an asset that may appreciate in value over time.
  • You want to own a property you may be able to turn into passive income by renting it out to others while you travel, live in a smaller home you own or live in an adjacent unit (like in a duplex).
  • You enjoy home maintenance like repairs and yard work, or have the budget to outsource them.
  • You want the freedom to remodel or rebuild a property to suit your needs.

Whether you rent or buy depends entirely on your personal circumstances. Each has advantages for some people. Just make sure you do the math and weigh your options fairly before deciding that one route is better than the other.

Check out our Rent or Buy Calculator to weigh your options.


Quontic Bank is not affiliated with or acting on behalf of or at the direction of Federal Housing Authority (FHA) or any government agency or government sponsored entity. All lending products are subject to approval. Rates, program terms & conditions are subject to change without notice. Not all products are available in all states or for all amounts. This does not represent an offer to enter into a loan agreement. Other requirements, restrictions & limitations apply. This is not financial advice, nor should it constitute or be construed as instruction for any individual reader, or group of readers, to act or make a decision in any financial capacity. Seeking independent, professional consultation from a qualified and licensed expert is always the optimum avenue in making financial decisions.

Information is accurate as of September 22, 2022 and is subject to change without notice.

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