Rent vs. buy calculator for New Jersey
Compare renting and buying
The home you would buy
The home you would rent
Your plan
Over the years you plan to stay
- Cash you need to buy: down payment plus closing costs
- Monthly cost of owning in year one: loan, tax, insurance, fee, upkeep
- Monthly cost of renting in year one
- Home value when you sell
- Loan balance when you sell
- Equity you walk away with, after selling costs
- What your cash would have earned if you kept renting
- Net cost of buying
- Net cost of renting
| Year | Net cost of buying | Net cost of renting | Equity if you sell |
|---|
Turn on JavaScript to use the calculator, or read the worked example below; it uses the same arithmetic.
Estimate for planning only, from the numbers you enter. It is not a loan offer, a pre-approval, investment advice or tax advice; I am a real estate agent, not a lender or an accountant. The rate, the growth rates and the return on savings are assumptions you should change; the mortgage interest deduction is left out on purpose (see the questions below). Net cost of buying = everything you pay, minus the equity you would keep after selling costs. Net cost of renting = rent paid, minus what your down payment and any savings would have earned.
Rent or buy: the honest math for the years you plan to stay
Enter a home and a rent, and this calculator compares what each costs over the years you plan to stay: mortgage, property tax, insurance, condo fee, upkeep and the cost of buying and selling, against rent and rent increases. It counts the equity you build and what your down payment would have earned if you kept renting, and it shows the break-even year, the first year when owning comes out ahead.
I am Bogdan Nicolae Rus, a REALTOR® with eXp Realty (New Jersey license #2186044) in Hoboken. I rented in Journal Square and in Newport before I bought, and I tell renters what I told myself: the answer depends on how long you stay, not on the headline payment. I work in English, Romanian and Spanish. Vorbim românește. Se habla español.
One Jersey City condo, bought or rented
A $750,000 condo with $150,000 down (20%, so no mortgage insurance) at 6.5% over 30 years, $12,000 a year of property tax, $120 a month of insurance, a $400 condo fee and 0.5% a year of upkeep, against renting the same kind of home for $3,800 a month. Prices grow 3% a year, rents 3%, the renter's savings earn 4% after tax, closing costs are 2% to buy and 6.5% to sell (a 5% example commission, not a quote, plus 1.5% of transfer fee, attorney and prep). Owning costs $5,625 a month in year one against $3,815 of rent; the buyer needs $165,000 up front. The rent and the prices are examples, not market figures.
- Home value $869,456
- Loan balance $561,666
- Equity after selling costs $251,275
- Renter's investment gains $46,694
- Net cost of buying $258,017
- Net cost of renting $196,358
- Renting ahead by $61,659
- Home value $1,007,937
- Loan balance $508,657
- Equity after selling costs $433,765
- Renter's investment gains $123,379
- Net cost of buying $438,415
- Net cost of renting $401,438
- Renting ahead by $36,978
- Home value $1,168,476
- Loan balance $435,355
- Equity after selling costs $657,170
- Renter's investment gains $231,866
- Net cost of buying $599,454
- Net cost of renting $619,592
- Buying ahead by $20,139
With these numbers buying comes out ahead from year 14. Change the rent, the down payment or the growth rates and that year moves; that is the point of running your own numbers.
Whichever way the math goes
If buying wins, the affordability calculator turns your income into a price range, the mortgage calculator shows the monthly payment and the closing costs calculator the cash you need; then start with the buyer form. If renting wins for now, I find rentals too: the rentals page explains how, with no pressure to buy before it makes sense. Either way, a private consultation is free.
Call (201) 584-6156 · Text mebogdan@bogdannicolaerus.com
eXp Realty, 50 Harrison St, Suite 205, Hoboken, NJ 07030
Renting or buying in Hudson County: frequently asked questions
Is it cheaper to rent or buy in Jersey City and Hoboken?
It depends on how long you stay, how much you put down, what the same home rents for and what your savings would earn instead. In the first years buying almost always costs more, because the closing costs, the interest-heavy early payments and the cost of selling have to be earned back through equity and price growth. Stay long enough and the picture turns. There is no blanket answer for the county; run your own rent and your own price, and I will check the inputs against what actually closes and rents on that block.
What does the break-even year mean?
The first year in which the net cost of buying is lower than the net cost of renting, counting everything on both sides: what you paid out, the equity you would walk away with after selling costs, and what your down payment and any savings would have earned if you had kept renting. If you expect to move before that year, renting is the cheaper choice on paper; after it, buying is.
Does the calculator include the mortgage interest deduction?
No. Most households take the standard deduction and get no benefit from mortgage interest or property tax, and for those who itemize the deduction for state and local taxes is capped. If you itemize, the real result tilts somewhat toward buying; your accountant can put a number on it. I would rather show a conservative answer than a flattering one.
Why does the return on my savings matter?
Because a down payment is money that could have been invested. If you keep renting, the calculator assumes you invest the down payment and the closing costs, plus any month in which renting is cheaper than owning, at the return you enter, after tax. Set it low for a savings account and higher for a long-term portfolio; the break-even year moves with it, and that is the honest part of the comparison.
What about rent control?
Jersey City and Hoboken both have rent control ordinances that limit yearly increases in many older buildings, while many newer buildings are exempt. If your building is rent-controlled, set the rent increase to what the ordinance allows; if you are in a new building, look at what your lease actually did last year. The rentals page explains how I check this for a tenant.
Is this financial advice or a loan offer?
No. It is arithmetic on the numbers you enter and on assumptions you can change; I am a real estate agent, not a lender, a financial adviser or an accountant. Price growth, rent increases and investment returns are guesses about the future, and a one-point change in any of them moves the answer. Use it to see which assumptions matter, then test them with people who are paid to know.