What's YOUR Personal Breakeven Point? Renting VS Buying

Mortgage and Lending with NMLS #216987, IL Lic. 031.0006220, WI Licensed. APMC NMLS #175656 IL Lic 031.0006220/WI

What's YOUR Personal Breakeven Point?

Renting VS Buying


      Do a Google Search.  Type in "home buying fears".  See all the pages of articles that pop-up addressing the topic and the many reasons you should or should not be fearful ... 

What's YOUR Breakeven Point?      Home evaluation is often mentioned within the context of both pro and con arguments found.  Rightfully so. Both present and future home value trends are vitally important.  

      Those thinking of buying a home now or soon need to educate themselves fully on 2 things in particular, though ...

  1. The speed in which home values have risen (historically and recently) in the area in which they hope to buy
  2. Projections for those home values in the future

      For those trying to decide which serves their interests better (Buy VS Rent), finding the "breakeven point" (often referred to as the "tipping point") of a purchase is instrumental to making a sound financial decision.  

     What is the "breakeven point"?  The "breakeven point" is that point (typically stated in years) at which the cost of buying a home becomes less costly than renting that same property. 

     What's taken into consideration and compared when calculating the "breakeven point"?  Included are:

  • Down payment/other upfront payments
  • Monthly rental payments
  • Mortgage payments
  • Taxes
  • Insurance (Homeowners vs Rental)
  • Maintenance costs
  • Closing Costs of a Mortgage
  • Utilities
  • HOA Fees 
  • Possible Miscellaneous Costs

 For those in the Chicagoland/IL area and facing some home buying trepidation, recent reports provide encouraging news regarding the area's "breakeven point".  It's trending downward and is currently being reported at 2.1 years.     

     This trend is also playing out in the majority of metro markets across the U.S.  72 out of the 100 largest markets show a home purchase becoming financially beneficial after less than2 years

Now there are always personal elements that must be taken into consideration during this decision-making process too.  

     Employment, relocation, changes within a family, plans for length of stay within an area/home ... are some of the most important.  

     But it's also important to remember:  A Buy VS Rent decision is very personal to you, your family.  The financial facts and individual elements feeding into your final decision belong to you and you alone.

The very same can be said for your mortgage financing, should you decide to pursue home buying.   Every step .. every decision ... every option ... is totally based and reliant on you and your personal scenario.  

     Please don't fall into the trap of comparing yourself to anyone else ... or their decisions and outcomes.  Ask questions, gain answers, compare facts as they pertain to you.  

     Do your homework.  Educate yourself.  Talk to local professionals, agent, and mortgage, for the info you need.

     That and that alone will reveal the decision best for YOU regarding Renting VS Buying and your personal breakeven point ...


*      Hoping to Buy or Refinance a home in Chicago or elsewhere in the Chicagoland area? Contact me! I'll put my 40+ years of Mortgage experience and expertise hard to work on your behalf.  

     I can be easily found at: 


Gene Mundt

Mortgage Originator - NMLS #216987 - IL Lic. #031.0006220 - WI Licensed
American Portfolio Mortgage Corp.
NMLS #175656

Direct: 815.524.2280
Cell/Text: 708.921.6331
eFax: 815.524.2281
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Gene Mundt

 Mortgage Originator  -  NMLS #216987    

                                 IL Lic. #031.0006220  -  WI License #216987                                                                                                    

NMLS #175656


Gene Mundt, Mortgage Originator,  40+ years of #mortgage experience, will offer you exemplary mortgage service and advice when seeking:  #Conventional, #FHA, #VA, #Jumbo, #USDA, and Portfolio Loans in #Chicago and the greater Chicagoland region, including:  The #Lincoln-Way Area, #Will County, (#New Lenox, #Frankfort, #Mokena, #Manhattan, #Joliet, #Shorewood, #Crest Hill, #Plainfield, #Bolingbrook, #Romeoville, #Naperville, #Wilmington, #Peotone, etc.), #DuPage County, the City of Chicago, #Cook County, and elsewhere within IL and Wisconsin. 


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Re-Blogged 2 times:

Re-Blogged By Re-Blogged At
  1. Jeff Dowler, CRS 07/05/2016 09:14 AM
  2. Charles Stallions 07/13/2017 04:00 AM
Lending / Financial
Illinois Will County New Lenox
Windy City Real Estate
Chicago Area Real Estate BUZZ!
1st Time Buyers
buy vs rent
financial decisions
breakeven point
buying a chicagoland home
monetary decisions
homebuying decision

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Jeff Dowler, CRS
Solutions Real Estate - Carlsbad, CA
The Southern California Relocation Dude


This was a very interesting read and something many buyers, especially for those interested in purchasing their first home, or perhaps waffling about changing from renter to homeowner. I suspect many do not think in these terms, and all the factors that go into making a sound financial decision. Thanks for sharing this with us.


Jul 05, 2016 07:03 AM #1
Bob "RealMan" Timm
Ward County Notary Services - Minot, ND
Owner of Ward Co. Notary Services, retired Realtor

Excellent post Gene Mundt, IL/WI Mortgage Originator - FHA/VA/Conv/Jumbo/Portfolio/Refi and you are so right that this is an evaluation you want to take time to research. Here in Minot ND, prior to the oil boom and the later slowdown, you could figure you would be able to buy and sell in as short of a period of one year without losing a penny. The same does not hold true today but as oil goes up (and it is) things are once again improving to what it once was.

Jul 05, 2016 07:10 AM #2
George Souto
George Souto NMLS #65149 FHA, CHFA, VA Mortgages - Middletown, CT
Your Connecticut Mortgage Expert

Gene excellent information for anyone considering purchasing a home, especially first time homebuyers.

Jul 05, 2016 07:20 AM #3
Sam Shueh
(408) 425-1601 - San Jose, CA
mba, cdpe, reopro, pe

I have had people calling me up telling me why they will continue renting vs purchase. Same wanting to take public transportation vs owning a car. The same argument can be used walking vs owning a bike, roller skates, or skate board.

What can I say to them?


Jul 05, 2016 08:08 AM #4
Kathleen Daniels
KD Realty - 408.972.1822 - San Jose, CA
San Jose Homes for Sale-Probate & Trust Specialist

Gene,  Its all about making informed decisions based upon facts ... and ones comfort level with where there are in life (job, marriage, etc.). I believe many think they can buy and they cannot ... no way ... no how ... and others don't believe they can ... and they absolutely can.  Work with a professional who can and will guide people through the process so they can make an informed decision about buying versus renting. 

Jul 05, 2016 08:14 AM #5
Tammy Lankford,
Lane Realty Eatonton, GA Lake Sinclair, Milledgeville, 706-485-9668 - Eatonton, GA
Broker GA Lake Sinclair/Eatonton/Milledgeville

One day in the not too distant future I need to have a conversation with you to get some perspective on a "situation" a past buyer is in to help me determin how to best advise her.

Jul 05, 2016 01:07 PM #6
Gayle Rich-Boxman Fishhawk Lake Real Estate
John L Scott Market Center - Birkenfeld, OR
"Your Local Expert!" 503-755-2905

Gene, good for you for addressing this!

My clients are so much different than this. Altho, there are those in Portland (90 mins away) who can't afford to buy OR rent, because buying has become so exorbitantly priced (it's the top place that people are moving to in the US), that the rental market has gone crazy, too. People are looking to live outside--way outside of the city--so they are willing to look at country property and some can work remotely so renting is not for them at ALL and they can afford places like ours at Fishhawk Lake if they don't have to do the drive every day. 

Jul 05, 2016 01:11 PM #7
Praful Thakkar
LAER Realty Partners - Andover, MA
Andover, MA: Andover Luxury Homes For Sale

Gene Mundt, IL/WI Mortgage Originator - FHA/VA/Conv/Jumbo/Portfolio/Refi - wow! Did not know this fact -- and that's one thing I should include in my buyer consultation --

"a home purchase becoming financially beneficial after less than 2 years"

Jul 05, 2016 01:44 PM #8
Harry F. D'Elia
RentVest - Phoenix, AZ
Investor , Mentor, GRI, Radio, CIPS, REOs, ABR

This great information for anybody who wants to purchase a home vs renting.

Jul 05, 2016 02:04 PM #9
Sham Reddy CRS
H E R Realty, Dayton, OH - Dayton, OH

Thanks for a great share!!!

The "breakeven point" is that point (typically stated in years) at which the cost of buying a home becomes less costly than renting that same property.

Jul 05, 2016 09:12 PM #10
Nina Hollander
Coldwell Banker Residential Brokerage - Charlotte, NC
Your Charlotte/Ballantyne/Waxhaw/Fort Mill Realtor

Hi Gene... I'm always reminding my clients that while they are buying a "roof over their heads" they are also making a huge investment. And they need to analyze that housing investment the way they would any other.

Jul 05, 2016 10:12 PM #11
Jennifer Mackay
Counts Real Estate Group, Inc. - Panama City, FL
Your Bay County Florida Realtor 850.774.6582

Unfortunately too many home buyers watch Television and believe the garbage they see from commercials like Apartments dot come etc. Thanks for sharing your insights Gene Mundt, IL/WI Mortgage Originator - FHA/VA/Conv/Jumbo/Portfolio/Refi 

Jul 05, 2016 10:14 PM #12
Cody Carmen
Adhi Schools, LLC - Rancho Cucamonga, CA
Market Analysis--Educational Content, Adhi Schools

Gene Mundt, IL/WI Mortgage Originator - FHA/VA/Conv/Jumbo/Portfolio/Refi, great article! I think the last housing crash scared people. So many people bought more than they should and paid the price (obviously a gross oversimplification, many others were caught up in a terrible economy). But now many people view buying a home as a bigger financial decision than it is. It is still a huge decision, but people are forgetting all of the points you make. Hopefully more people read this.

Jul 06, 2016 02:49 AM #13
Carla Muss-Jacobs, RETIRED
RETIRED / State License is Inactive - Portland, OR

This is a wonderful way to look at it, and finding out about the rent vs. buy condundrum.  Breakeven is now into my script!  Thanks Gene Mundt, IL/WI Mortgage Originator - FHA/VA/Conv/Jumbo/Portfolio/Refi  great research done here!

Jul 06, 2016 04:34 AM #14
Michael Jacobs
Pasadena, CA
Los Angeles Pasadena 818.516.4393

Hi Gene ---- I like the "breakeven" concept you address as well.  Definitely gold star worthy.  Bookmarked too --- for the valuable information you present and they way you present it.  

Jul 06, 2016 04:51 AM #15
Corinne Guest
Corinne Guest, REALTOR® | Barrington Realty Company - Barrington, IL
Barrington Lifestyles

Thank you for highlighting that buying v renting is also a very personal decision and choice and there's more than simply interest rates that get factored in. So many lenders just push "the time is now" and it isn't always so.

Jul 06, 2016 07:09 AM #16
Sally K. & David L. Hanson
EXP Realty 414-525-0563 - Brookfield, WI
WI Realtors - Luxury - Divorce

First timers most especially need this information !

Jul 06, 2016 10:07 AM #17
Will Nesbitt
Nesbitt Realty at Condo Alexandria - Alexandria, VA
Nesbitt Realty is a family-run brokerage.

(815) 524-2280 Gene Mundt, IL/WI Mortgage Originator - FHA/VA/Conv/Jumbo/Portfolio/Refi in New Lenox, IL.

Jul 08, 2016 05:42 AM #21
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