Rate Impact on Monthly Cost to Own
Rate impact on monthly cost to own — $400K purchase, 10% down payment
| Mortgage Rate | Monthly Payment ($400K, 30-yr, 10% down) | Monthly Cost vs. 3% Rate | Monthly Cost vs. 6% Rate |
|---|---|---|---|
| 3.0% | $1,519 | Baseline | −$744 |
| 4.5% | $1,824 | +$305 | −$439 |
| 6.0% | $2,263 | +$744 | Baseline |
| 6.5% | $2,403 | +$884 | +$140 |
| 7.0% | $2,547 | +$1,028 | +$284 |
| 7.5% | $2,694 | +$1,175 | +$431 |
The difference between a 3% and 7% mortgage on a $400,000 loan: $1,028/month — $12,336/year. This rate movement alone has pushed renting vs. buying break-even periods from 3–4 years to 7–10 years in many markets, fundamentally changing the decision for millions of potential buyers.
Break-Even Timeline at Different Rates
Break-even timeline sensitivity to mortgage rate — Columbus OH example
| Mortgage Rate | Monthly Own vs. Rent Gap | Years to Break Even (Columbus, OH) |
|---|---|---|
| 5.0% | +$150/mo | 3.5 years |
| 6.0% | +$500/mo | 5.8 years |
| 6.5% | +$700/mo | 7.2 years |
| 7.0% | +$850/mo | 8.9 years |
| 7.5% | +$1,000/mo | 10.5 years |
What Rate Makes Buying More Appealing
For each market, there’s a rate at which buying produces a break-even under 5 years — the threshold where most buyers should be confident about staying. In Columbus (P/R ~18): a rate below 5.5% produces a 3–4 year break-even. In Denver (P/R ~22): below 4.5% for the same result. Market P/R ratio and rate interact to set the favorable buying threshold.
See the Rate’s Effect on Your Market
Enter your local prices, rent, and the current rate to find your break-even.