Rent or Own Home: Which is Better?

rent or own home which is better

Should Your Rent or Own Home?

Used to be, it was considered a given that owning a home made more sense than renting. But these days it is not so cut and dry. There are pros and cons to both choices, and your answer depends upon what you feel is better for you.

Things to Consider When Rent or Own Home

1. Cost of buying is more than the purchase price.

When you buy a home, it can come with costs and fees you’ll need to pay:

  • Lender’s mortgage origination fees
  • Closing costs, which typically cover escrow fees, property taxes and interest
  • Homeowner’s insurance
  • Ongoing property taxes
  • Mortgage interest fees
  • Homeowners Association (HOA) fees
  • Repairs and maintenance costs

If you have a limited amount you can afford to pay, renting can be a good option.

2. New tax laws change the way mortgage interest can be deducted.

One big plus to owning might have changed for you. As of the 2018 tax filing, an owner who itemizes deductions can no longer write off mortgage interest payments in the same way. Before, you could borrow from your home’s equity, use the funds as you wanted, and deduct the mortgage interest. Now, however, you can only make the deduction on funds you use for improving or repairing your home.

3. You can build equity in your home when you own.

If your home’s value goes up, you’ll be able to make a better profit. Plus, unlike a rental where your monthly payment can rise, you can lock in the price of your loan payments if you get a fixed-rate mortgage.

4. If you need flexibility, renting makes sense.

Your current situation plays into your decision whether to rent or own. If you want to stay put for at least five years, buy a home that will fit your needs down the road, too, if possible.

In Summary

Pros of Owning

  • You don’t have to deal with a landlord
  • Could build equity and credit
  • Can enjoy better stability
  • Make changes to your home as you see fit
  • You might be able to deduct equity funds used for home improvements

Cons of Owning

  • Sizeable amount of money required up front
  • You have ongoing expenses including maintenance, improvements and property taxes
  • Your home’s value could decline

Pros of Renting

  • Lower upfront costs
  • Easier mobility if you need to move
  • Landlord pays for repairs and maintenance
  • No property taxes
  • Some states offer renters tax credits

Cons of Renting

  • Rent can be raised
  • Landlord could sell the property
  • No equity is built
  • No tax benefits if your state doesn’t allow renters tax credits

Learn more on about both renters and homeowners insurance and find the best coverage for you.


EINSURANCE is a one stop shop for insurance quotes comparison. Our writers, researchers, and industry experts all work together to inform consumers about online insurance marketplace. Whether you’re buying your first car insurance policy or finding health insurance for your families, EINSURANCE always provides latest relevant information to your choices.