Should you buy, or keep renting?

Rent is almost entirely a cost you do not get back. A mortgage payment is not: part of it is principal, which is savings you can reach when you sell. Comparing the two directly makes owning look more expensive in the early years than it really is, and cheaper in the later years.

The fair comparison is what each option costs you and never comes back:

• If you own: mortgage interest, property tax, insurance, HOA dues, maintenance, mortgage insurance while equity is under 20%, the cost of buying and selling, and the return your down payment would have earned somewhere else.
• If you rent: rent and renters insurance.

The calculator above does this year by year and turns it into one number: what you would be worth at the end of your stay under each option, assuming you spend the same cash either way.

Buying has costs at both ends. Closing costs come due when you buy, and commission, transfer tax or deed excise stamps and any concessions come due when you sell. Together they are usually several percent of the price, and over a short stay there is little time for equity or appreciation to cover them.

That is why the calculator shows a break-even year. If you are confident you will stay well past it, owning tends to win on your assumptions. If you could plausibly leave before it, because of a job that may move or a household that may change, that risk is the real cost of buying.

The arithmetic is the same in both states. What changes is the tax line, which is why the calculator asks for the rate on the specific address rather than using a regional figure.

• North Carolina: counties reappraise property on a cycle, so the tax bill can step up at a revaluation even if the rate stays the same. The combined rate depends on the county and the municipality. The county tax offices are linked below.
• South Carolina: an owner-occupied primary residence is assessed at a lower ratio than other property, but only once the owner applies for it. That difference is large enough to change a rent-versus-own result, and it does not apply if you buy to rent out.

If you are weighing one side against the other, the North Carolina vs South Carolina comparison sets out the rest of the trade-offs, and the property tax guide explains how the bills are built.

Renting gives you flexibility, and the calculator does not put a price on it. You can leave with a notice period instead of a sale. A failed roof or HVAC system is the landlord's problem and does not hit your savings. And if you are new to the region, renting lets you live in a corridor before you commit to it.

That last point is the most useful one for people relocating. Plenty of people pick an area from a distance, then find in the first few months that their commute or daily routine points somewhere else. A twelve-month lease in the corridor you think you want is a cheap way to test it. The area matchmaker can narrow the shortlist before you sign one.

Owning gives you control, and that is not in the model either. You can renovate, keep a pet without asking, and stay as long as you want without facing a renewal. With a fixed-rate mortgage, principal and interest do not change for the life of the loan. Rent changes at every renewal, and property tax and insurance can still rise for an owner.

Owning also concentrates risk. A large share of your net worth sits in one asset, in one location, that you cannot sell quickly. Whether that is acceptable is a judgement about your circumstances, not something a calculator can decide.

The calculator only models the assumptions you give it. It is not a forecast. To keep it honest, it leaves out anything that depends on your tax position rather than on the house:

• income tax on investment gains, which would reduce what the renter's savings earn
• the mortgage interest and property tax deductions, which only help if you itemise
• capital gains tax on the home, which an exclusion often covers for a primary residence
• reappraisal timing, which it approximates by growing the tax bill with the home's value

For anything that depends on your tax position, ask a tax professional. The CFPB's homebuying resources are a good neutral starting point on loan costs.