Benefits of Owning Versus Renting a Home

Are you deciding between renting a home and owning a home? It’s one of the biggest financial choices you’ll make and the right decision depends on your goals, lifestyle, and future plans. In this guide, we’ll compare the benefits of owning versus renting a home, so you can decide what’s best for you. Whether you’re a first-time buyer or someone tired of rising rents, we’ll show you why homeownership might be the smarter move in 2025.

What’s the Difference Between Owning Versus Renting a Home?

Renting a home means you’re paying a landlord every month, and you don’t own any part of the property. Owning a home means you make mortgage payments and build equity in a property you control. When it comes to financial security, stability, and long-term wealth, the benefits of owning versus renting a home are clear.

Top Benefits of Owning a Home

Let’s look into the key benefits of owning versus renting a home.

You Build Equity Over Time

One of the biggest advantages of owning versus renting a home is building equity. Every mortgage payment you make goes toward owning more of your home. Over time, your home may also increase in value, helping you grow your net worth. Renters don’t build equity. They pay monthly and walk away with nothing.

Fixed Monthly Payments with a Fixed-Rate Mortgage

When you own your home with a fixed-rate mortgage, your mortgage payment monthly stays the same for the life of the loan. With rent, your landlord can raise your payment at lease renewal. Owning a home means no surprise rent hikes.

Tax Benefits and Deductions

A major benefit of owning versus renting a home is the tax advantage. Homeowners can take off mortgage interest, property taxes, and some closing costs. These reductions can lower your taxable income and save you money every year. Renters do not receive any tax benefits.

You Have Full Control of Your Space

When you own your home, you can paint the walls with any color you like, renovate the kitchen or bathroom, and landscape your yard.
Renters need landlord approval for changes, and in most cases, customization is limited. Owning gives you freedom—renting gives you restrictions.

Owning a Home Builds Long-Term Wealth

Many Americans build their wealth through real estate. Owning a home is a long-term investment that can increase in value over time. Renting doesn’t offer that opportunity. The benefits of owning a home include appreciation, equity, and asset growth.

More Privacy and Stability

Owning a home means you don’t have to deal with noisy neighbors above or below you. You can stay as long as you want and aren’t at risk of your landlord not renewing the lease or selling the property. Owning a home gives you control. Renting comes with uncertainty.

Owning Is Often Cheaper Over Time

Even though the upfront cost of owning can be higher, the long-term advantages of owning versus renting a home often outweigh the cost of renting. Rents go up—mortgage payments on a fixed loan stay the same. Over 10 years, homeownership often costs less than renting the same space.

When Renting a Home Makes Sense

While the benefits of owning versus renting a home are strong, there are times when renting is the better option:

• You’re planning to move within a year or two
• You don’t have enough saved for a down payment
• Your credit needs improvement
• You’re uncertain about your job or income

In these cases, renting offers more flexibility and fewer responsibilities.

Appreciation Benefits of Owning Versus Renting a Home

Historically, real estate has gained long-term, stable growth. According to the National Association of Realtors, home sale prices have increased 5.2 percent per year from 1972 through 2014.  That’s over 30 years of growth.

If you’re looking for a good long-term investment, real estate provides that. The housing crisis created concern regarding the long-term value of the real estate, but even in the last decade, overall values still increased by 7.0 percent.

Additionally, with the millennials, the number of households is expected to rise 10 to 15 percent over the next ten years. This will create continued demand for housing.

Owning Versus Renting a Home To Build Equity

Mortgage payments let you build equity. The payments you make go towards building equity. When you pay rent, you help someone else build equity. Think of it as a built-in savings plan. When you sell, you can take up to $250,000 for an individual and $500,000 for a married couple as a gain without paying income tax on it.

Does a monthly fixed-rate PITI mortgage payment increase for homeowners is an often frequently asked question. The PITI is a homeowners principal, interest, taxes, and insurance. The principal and interest remain the same throughout a 15 and 30-year fixed-rate mortgage. However, property taxes and homeowners insurance can increase or decrease depending on the property tax and homeowners insurance premium. Rental payments normally always increase every year when the tenant renews the lease. On average, rent payments increase from 5% to 7% every year when the rental agreement is renewed.

How Does Monthly Housing Payments Change Owning Versus Renting a Home?

Unlike rent, with a fixed-rate mortgage, payments don’t rise over the years. So your payments may decline over time. Investors that own rental properties increase monthly rents by an average of 5 percent per year. Keep in mind property taxes and insurance costs will likely increase but the monthly mortgage payment will stay the same, unlike monthly rent from year to year.

Freedom Is a Reason For Owning Versus Renting a Home

The home is yours to decorate however you like and add upgrades, additions, or any other changes. You can also make alterations as your lifestyle, preferences, or needs, such as a growing family, change without requesting permission (unless it’s work that requires a permit). Remaining in the same area for several years also provides social benefits such as building long-lasting relationships with neighbors and others in the community. If you have kids, they also benefit from that educational and social continuity. Plus, you don’t have to worry that your landlord may decide to sell and not renew your lease. Now you must house hunt, pay moving costs, and deal with the hassle.

What Are The Best Mortgage Options In The Marketplace?

The team at Gustan Cho Associates are experts in helping first-time homebuyers, borrowers with prior bad credit, homebuyers with credit scores down to 500 FICO, self-employed borrowers, 1099 income wage earners, W2 income only mortgage borrowers, non-QM and alternative mortgage borrowers, and no-doc mortgage borrowers.

Gustan Cho Associates, empowered by NEXA Mortgage, LLC, are mortgage brokers licensed in 48 states with a lending network of 210 wholesale mortgage lenders including dozens of no overlay government and conventional lenders and dozens of non-QM and alternative lending partners.

The team at Gustan Cho Associates are experts in being able to do mortgage loans other loan officers cannot do. Gustan Cho Associates are mortgage brokers licensed in 48 states, including Washington DC, Puerto Rico, and the U.S. Virgin Islands.

Gustan Cho Associates Has The States, Products, and The Lowest Rates

We are experts in working with realtors nationwide, especially in our home state of Illinois and hometown of Chicago and surrounding suburbs. We work closely with veteran real estate agents who represent home buyers and home sellers in Chicago and its surrounding suburbs. Our referral network of real estate agents represents home buyers and sellers in Cook County, Lake County, Kane County, DuPage County, McHenry County, and Lake County.

Frequently Asked Questions: Benefits of Owning versus Renting a Home

1. Is it better to rent or buy a home?

It depends on your plans and goals. Renting gives you flexibility, but buying builds equity and can save you money in the long run.

2. What are the benefits of owning a home?

When you own, you build wealth through home equity, get tax breaks, and have stable monthly payments if you have a fixed-rate mortgage.

3. Why do people say renting is “throwing money away”?

Because monthly rent goes to your landlord, not toward something you own. With a mortgage, you’re paying into something that becomes yours over time.

4. Can owning a home really help me build wealth?

Yes! As home values go up and your mortgage goes down, your equity grows—this becomes a major asset over time.

5. Owning versus renting a home, what is cheaper?

It depends on the market, but monthly mortgage payments can be cheaper than rent in many areas—plus, you’re investing in yourself, not your landlord.

6. Are there any tax benefits to owning a home?

Yes. You may be able to subtract mortgage interest, property taxes, and even certain home improvements on your taxes.

7. Do I have more freedom when I own a home?

Absolutely. You can paint, remodel, build, or decorate however you like. No landlord permission needed. This is one of the best advantages of owning versus renting a home.

8. Is renting ever a better choice than buying?

It can be. Renting is good if you plan to move soon, don’t want maintenance responsibilities, or if you need time to save for a down payment or you need to improve your credit.

9. What are the long-term advantages of buying a home?

Over time, you build equity, enjoy appreciation if home values rise, and create a stable place for your family—often with lower overall costs.

10. Can I buy a home with low credit or low income?

Yes, there are loan programs like FHA and VA that help people with lower credit or smaller down payments become homeowners.

Why Choose Us at Gustan Cho Associates?

Our team of associate contributing editors at Gustan Cho Associates are experts in real estate home values in the Chicagoland area. Our dually licensed realtor and mortgage loan officer associate contributing editors diligently keep an eye on what sells and check the MLS daily hot sheets.

Proudly to say Gustan Cho Associates has a team of the best of the best dually licensed realtor and mortgage loan officer agents in the nation who know what comes out on the market every day.

If you have any questions about owning versus renting a home and any of our mortgage loan programs, please get in touch with us at Gustan Cho Associates at 262-716-8151 or text us for a faster response. Or email us at gcho@gustancho.com. The team at Gustan Cho Associates and its affiliates are available seven days a week, evenings, weekends, and holidays.