Using Your Rent-to-Own Calculator

Use this calculator to analyze your potential rent-to-own deal. Adjust the inputs to see how your monthly payments build toward your down payment and how market changes might affect your equity position.

Setting Up Your Numbers

Agreed Purchase Price

Enter the home price you and the seller have locked in today. This is the amount you will pay when you exercise your option to buy, regardless of how the market moves during your lease term.

Lease Term

Select how many years you will rent before deciding whether to purchase. Most rent-to-own agreements run one to three years, though some extend to five years. The longer your term, the more time you have to improve your credit and save for closing costs.

Monthly Rent

Enter the total amount you pay each month. In rent-to-own agreements, this amount is typically higher than standard market rent because a portion goes toward your future purchase.

Rent Credit Percentage

This percentage determines how much of your monthly rent the seller credits toward your down payment. This is one of the most important terms to negotiate.

In practice, rent credits work by charging you above market rent. For example, if market rent is $1,500 per month but you pay $1,875, that extra $375 (25% above market) becomes your rent credit. Over three years, this builds $13,500 toward your down payment.

Typical rent credits range from 20% to 50% above market rent. A 25% to 30% premium is common in many markets. The higher the percentage, the faster you accumulate down payment funds. However, you need to ensure the monthly payment fits your budget while still allowing you to save additional money for closing costs.

Upfront Option Fee

This is the non-refundable deposit you pay at signing to secure your right to purchase the home later. Option fees typically range from 1% to 7% of the purchase price, with 2% to 5% being most common.

Whether this fee applies to your down payment depends on your specific contract. Many agreements credit it toward your purchase, but this is a negotiable term you should clarify before signing. If you choose not to buy or cannot qualify for financing, you will lose this fee.

Estimated Annual Appreciation

Enter your best estimate of how much the home’s value will grow each year. This helps you understand potential equity gains.

Historically, homes in the United States appreciate 3% to 5% annually on average, with a long-term average around 4% per year. However, rates vary significantly by location and market conditions. Urban areas and tech hubs often see 5% to 7% or higher, while rural areas may see 1% to 3%. Recent years have shown higher appreciation in many markets, but past performance does not guarantee future results.

Since your purchase price is locked when you sign, any appreciation above your agreed price becomes instant equity when you buy. If you lock in a $250,000 price and the home appreciates to $270,000 during your lease, you gain $20,000 in equity at closing.

Reading Your Results

The Projections Chart

The purple shaded area shows your accumulated savings over time. This combines your upfront option fee (if it applies to your down payment) plus all monthly rent credits. This represents the cash available for your down payment when you are ready to buy.

The green line projects what the house might be worth in the future based on your appreciation estimate. The grey line shows your locked purchase price. When the green line rises above the grey line, the gap represents your potential profit or equity gain.

Deal Analysis Feedback

The calculator evaluates your inputs and provides feedback on key concerns:

If your rent credit percentage is unusually low (under 20% above market rent), you will receive a negotiation alert. Low credits mean slower down payment accumulation and may indicate an unbalanced deal.

If your fees seem high relative to the purchase price, the calculator will flag this as well. Option fees above 7% are uncommon and may warrant negotiation.

The equity projection shows whether you are likely to have built-in equity at purchase time. This happens when appreciation during your lease term exceeds your locked price, giving you instant value when you close.

What Happens If You Walk Away

If you decide not to purchase or cannot qualify for a mortgage at the end of your lease, you will forfeit both your option fee and all accumulated rent credits. These funds remain with the seller. This is one of the most important risks to understand before entering a rent-to-own agreement.

Before committing to any rent-to-own deal, consider whether you will realistically qualify for a mortgage when your lease ends. Work on improving your credit score, reducing debt, and maintaining stable income throughout the lease term. Speak with a mortgage lender early to understand what you need to qualify.