Finance category
Mortgage, loan, investing, tax, and money calculators.
Rent-to-Own Calculator
Rent-to-own combines a lease with a purchase option. Option fee (non-refundable) + monthly rent credit toward purchase. After 2-5 years, tenant decides: buy or walk. This calculator sizes total cost.
Net purchase price if you buy
$315,000
Total credit (option fee + rent credits)
$15,000
Total rent paid over term
$70,200
Total cost if you walk away
$76,200
Rent premium vs market
$9,000
How the math works
$330K price, $6K option + 36 × $250 = $15K credit. Net $315K if you buy. Rent premium over market: $250 × 36 = $9K of extra rent.
Deal makes sense if price will appreciate and you will qualify. Run monthly — save more than rent premium each month so you're ready to exercise.
How to Use
- Enter purchase price, option fee, monthly rent, and rent credit portion.
- Enter RTO term and market rate.
- See total RTO cost vs renting then buying.
Frequently Asked Questions
When does RTO make sense?
Buyer with credit issues (700 FICO in 2-3 years) or needing time to save down payment. Lock in price today; buy when qualified. Seller with trouble selling benefits from higher yield.
Downsides?
Above-market rent (with credit portion inflated). Lose option fee + credits if can't close. Repairs often tenant-responsibility despite being 'renter.' Scam risk if seller's loan has due-on-sale issues.
Legal protection?
Use an attorney. Record memorandum of purchase option with county. Clear forfeiture terms. Without recorded documentation, tenant has minimal legal recourse if seller sells to someone else mid-option.
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