Renting vs. Buying a Home: The 5% Rule Updated for 2025

Updated: June 24, 2025

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Comparing a home loan payment to lease is not an apples to apples comparison. In order to effectively examine the lease versus purchase choice, we need to compare the total * unrecoverable expenses * of renting to the overall unrecoverable expenses of owning.

That may seem like a complex task, nevertheless I have actually boiled it down to a standard estimation.

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You cant compare lease to a house mortgage payment. By doing this of thinking about the rent versus buy choice is very flawed. Comparing a home loan payment to lease is not an apples to apples contrast. In order to successfully evaluate the lease versus purchase option, we need to compare the overall * unrecoverable expenses * of renting to the overall unrecoverable expenses of owning.

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