Rent vs. Total Cost of Ownership

What it means

• Compares the all-in monthly cost of owning a typical home to the rent on a similar place.
• Ownership cost includes principal and interest plus an estimate for property taxes, insurance, and maintenance (about 2% of home value per year).
• When ownership runs well above rent, renting is the cheaper monthly option; when it runs below, owning is. This compares cash flows only — it doesn't account for equity buildup or opportunity cost on the down payment.