See what a rent-to-own (lease-option) deal builds for you. Enter the option fee, monthly rent credits and the purchase price you lock in today, and find your equity when you buy, the money at risk if you walk away, and how the total cost compares with buying now or simply renting.
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The home & price
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$
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years
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Lease-option terms
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Often 1%–5% of the price
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$
Part of the rent set aside toward the purchase
$
What a normal lease would cost
Buying now instead (comparison)
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%
%
% / yr
$/ yr
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Enter your values to see the result.
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How to use the Rent to Own Calculator
Enter the home's value today and the purchase price in the contract: a fixed amount or today's value plus a yearly increase.
Set the lease term and how much you expect the home to appreciate each year.
Add the option fee, monthly rent and rent credit, plus the market rent of a similar home.
Fill in the buy-now numbers: down payment, mortgage rate, closing costs, property tax, insurance and upkeep.
Press Calculate equity to see your equity at purchase and which path has the lowest net cost.
Expected value at purchase = value today × (1 + appreciation)years
Equity when you buy = expected value − (purchase price − credits)
At risk if you don't buy = option fee + (lease rent − market rent) × months
Net cost of each path = cash paid (including closing costs) + lost investment return − equity at the end of the term
Example (default inputs): a $300,000 home with a $320,000 price locked for 3 years, a $9,000 option fee and $300 a month of credits from $2,200 rent. Credits reach $19,800. At 3% a year the home should be worth about $327,818, so equity when you buy is $327,818 − ($320,000 − $19,800) ≈ $27,618. Walking away would forfeit the $9,000 fee plus $9,000 of rent paid above the $1,950 market rent.
Rent-to-own terms to check before you sign
Term
What to look for
Option fee
Amount (often 1%–5%), whether it is credited, and whether it is refundable if the seller defaults
Purchase price
Fixed now or set by appraisal later; compare with recent sales nearby
Rent credits
Monthly amount, and whether one late payment cancels them
Maintenance
Who pays for repairs during the lease
Option or obligation
Lease-option (may buy) vs. lease-purchase (must buy)
Title and liens
Seller's mortgage must stay current; check title before paying the fee
Tips
Talk to a mortgage lender at the start and work on the credit or savings issue that keeps you from buying now.
Get an independent appraisal and a home inspection before you pay the option fee.
Have the agreement reviewed by a real estate attorney and recorded where your state allows it.
Frequently asked questions
How does rent to own work?
In a lease-option you rent a home for a set term, usually one to three years, and pay an upfront option fee for the right, but not the obligation, to buy it at a price agreed now. Part of each month's rent is often credited toward the purchase. At the end you can buy, using the credits toward the down payment, or walk away and lose the fee and credits.
What is an option fee?
It is the upfront payment that buys you the exclusive right to purchase the home later, commonly around 1% to 5% of the price. It is usually non-refundable, but is often credited toward the purchase price if you buy. Get in writing whether it is credited and what happens to it if the seller cannot sell.
How are rent credits calculated?
Rent credits are the part of each monthly payment that the seller agrees to put toward your purchase. Total credits = monthly credit × months of the lease, plus the option fee if it is credited. For example, $300 a month for 36 months plus a $9,000 option fee gives $19,800 toward the purchase.
Is rent to own a good idea?
It can help if you need time to repair credit or save a down payment and the price is fair. The risks are paying above-market rent, losing the fee and credits if you cannot get a mortgage at the end, and a locked price that is higher than the home turns out to be worth. Compare the net cost here with buying now and with renting.
What is the difference between a lease-option and a lease-purchase?
A lease-option gives you the right to buy but you can walk away, losing only the fee and credits. A lease-purchase obligates you to buy at the end of the lease, and failing to do so can be a breach of contract. The financial math is similar, but the risk is not.
What happens if the home is worth less than the agreed price?
If the home appraises below the locked price, a lender will lend only on the appraised value, so you would need more cash or would have to renegotiate. Your credits then partly just offset paying above market. This calculator flags that case when your expected equity is lower than your credits.
Are all the tools on FreeToolCabin tested for quality and accuracy?
Yes! Every tool on our site undergoes automated Q/A testing in real browser environments to ensure high precision, correct output, and zero errors. If you happen to spot a bug or have a suggestion, please contact us at [email protected] and our team will review it right away.