1. What is Rent-To-Own?

Rent-to-own is a real estate agreement where tenants rent a property with the option to buy it later. A portion of each rent payment may go toward the eventual purchase price.

2. How Does the Calculator Work?

The calculator uses the rent-to-own formula:

Where:

• Purchase Price — The agreed future purchase price of the property
• Interest — Total interest paid over the term
• Down Payment — Initial payment made at signing
• Months — Duration of the rent-to-own agreement

Explanation: This calculation spreads the total cost (price plus interest minus down payment) evenly over the term of the agreement.

3. Importance of Rent-To-Own Calculations

Details: Understanding your monthly payment helps evaluate whether a rent-to-own agreement fits your budget and compares favorably with traditional financing options.

4. Using the Calculator

Tips: Enter all values in dollars (no commas). Ensure the down payment doesn't exceed the purchase price, and the term is at least 1 month.

5. Frequently Asked Questions (FAQ)

Q1: What's typical for rent-to-own terms?
A: Terms usually range from 1-5 years (12-60 months), with 10-20% of rent payments often credited toward purchase.

Q2: How is interest determined?
A: Interest is typically calculated based on the purchase price and agreed rate, similar to a mortgage.

Q3: Are there additional fees?
A: Some agreements include option fees or maintenance responsibilities - these aren't included in this basic calculation.

Q4: What happens if I don't buy?
A: This varies by contract - you may forfeit any rent credits or option fees paid.

Q5: How does this compare to renting then buying?
A: Rent-to-own often costs more than separate renting + buying, but provides price certainty and the option to buy later.