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How Owning a Home Can Help Renters Fight Inflation

With inflation and rent prices now soaring, buying can be a smart way to inflation-proof your financial future. Use our Home Investment Calculator to see how.

Homeownership Gives You Cost Control

Rent prices can change every year depending on your lease terms, typically rising 2-3% on average. For homeowners, a fixed-rate loan means having the same principal and interest payment every single month.

The charts below show how renting costs that often start low can catch up to mortgage payments over time.

Your Scenario: Monthly Housing Costs

Renter
Monthly Payment
Total Paid on Rent:
Homeowner
Monthly Payment
Total Paid on Mortgage:
These calculations estimate a 2.5% annual increase in renting costs, compared to a full mortgage payment with a 6.125% interest rate, including monthly escrows for 1.2% property taxes and 0.35% homeowners insurance. Costs for taxes and insurance can go up or down every year, which is why we’re using your first year’s full mortgage payment as the historical benchmark.

Key Takeaway:

Rent prices increase an average 2.5% every year, while a fixed-rate mortgage payment (principal and interest) never changes.

Homeownership Can Help You Build Wealth

While there are no guarantees, history shows that homes increase in value over time. Over the last 50 years, average annual home price appreciation is about 3%. At the same time, homeowners build additional equity every month by paying down a portion of their loan balance.

These calculations estimate your home equity amount based on the combined power of your regular payments plus that average annual appreciation.

Your Scenario: Home Equity + Wealth Gains

Renter
Total Spent on Rent Equity
Homeowner
Home Value Equity

Key Takeaway:

Renting builds equity for someone else. Homeownership can help you build wealth over time.

Homeownership Can Help Beat Inflation

Rent costs and inflation are soaring. Realtor.com reports median rent prices are up 22% from just two years ago, with little relief on the horizon.

Historically, owning a home has served as a way to protect against rising inflation.

Here’s how it can help:

You have payment security

A fixed-rate mortgage helps Veterans take control of their monthly housing costs. VA buyers also have access to some of the lowest average rates on the market.

You build (even more) equity

Home prices typically increase with inflation. Owning a home protects you from future rent hikes and helps you build equity for yourself. Homeowners can access their equity through home equity loans, home equity lines of credit (HELOC), or by selling their home.

You invest in your future

The median home sale price has jumped 200% over the last 25 years, according to the Federal Reserve. Home equity levels are at all-time highs, and home remains a huge investment for most Americans.

To be sure, the right time to buy is when you’re ready. One way to think about readiness is to run some numbers – that’s where our Home Investment Calculator comes in. Run the numbers to see for yourself.

See What You Qualify For

Answer a few questions below to speak with a specialist about what your military service has earned you.

All charts and calculators are for illustration purposes only. All calculations assume a 30-year fixed rate VA mortgage with no down payment, 720 credit score, 6.125% interest rate, 1.2% property tax rate, and 0.35% homeowners insurance rate. Rates may vary by market conditions and credit score. Additional costs of homeownership including maintenance, homeowners association dues, and utilities may apply and fluctuate from year to year. Talk with your loan officer to learn more about home affordability.
After 10 years, you could build up to in wealth by owning instead of renting.
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Home Appreciation Value: [calculating]
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