If you’ve ever wondered how rent-to-own payments are calculated, you’re not alone. One of the most common questions we get from future homeowners is: “How much will my monthly payment be in a rent-to-own program?”

Let’s break it down in plain English—and show you why the monthly payment often looks a lot like a regular mortgage payment, even if you can’t qualify for one just yet.

What Is a Rent-to-Own Payment?

In a rent-to-own program, your monthly payment is made up of two parts:

  1. A rent portion (which covers the cost of living in the home including mortgage, property tax and house insurance), and

  2. A credit portion (which is credited back towards your future down payment when payments are made on-time).

Together, this payment is designed to closely mirror what you’d pay if a bank gave you a mortgage today—without requiring perfect credit, a large down payment, or extra cash for closing costs.

The Formula Behind Rent-to-Own Payments

Let’s say the home you want to rent-to-own is $600,000, and you’ve saved $30,000 for a down payment. That means you’d need to borrow the remaining $570,000 if you were getting a mortgage from a bank.

Even if you don’t qualify for that mortgage today, we still use this number—$570,000—to calculate your monthly payment.

Here’s why:

The rent-to-own payment is based on what a mortgage payment would look like if you could get approved today.

So in this example, your monthly payment would be designed to closely match the monthly cost of carrying a $570,000 mortgage.

Real-Life Example

If you were approved today for a 5-year fixed mortgage at a competitive interest rate, here’s how that might look:

  • Home Price: $600,000

  • Your Down Payment: $30,000 (5%)

  • Remaining Mortgage Amount: $570,000

  • Monthly Payment (Principal & Interest): Approx. $3,300–$3,500/month*

That’s roughly the same monthly amount you’d pay in the rent-to-own program.

*Note: Actual rent-to-own payments may vary slightly based on property taxes, insurance which are rarely included in a mortgage calculator calculation.

✅ BUT HERE’S THE DIFFERENCE:

  • You don’t need a full 20% down.

  • You don’t need $10K+ for closing costs.

  • You don’t need perfect credit to get started.

And while you’re living in the home, a portion of every monthly payment goes toward increasing your equity.

Why This Works for Aspiring Homeowners

This approach helps families and individuals who are:

  • Earning a good income but haven’t saved a huge down payment yet

  • Struggling with bruised credit

  • Feeling stuck renting while home prices keep climbing

With rent-to-own, you lock in today’s purchase price, move into the home you choose, and grow your savings as if you already owned it.

Bottom Line: Rent-to-Own Payments Mimic Mortgage Payments—Without the Usual Roadblocks

So if you’re worried that rent-to-own is more expensive than buying, take a closer look.

The monthly payment is designed to reflect what you’d already be paying on a mortgage for the same house—with the bonus of building equity and skipping the upfront costs banks require.

This is your path to homeownership, minus the barriers.

Find out more about how the qualifications and the program work