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Quick answer

At current rates, renting wins over the full 30-year horizon in Lexington. Monthly ownership cost $2,104 (vs $$1,350/mo rent) plus KY's 0.83% property tax make the math tough.

Rent vs Buy · KY

Rent vs Buy in Lexington (2026)

Real math using KY's 0.83% property tax rate, $2,200/year average insurance, and a 6.8% 30-year fixed mortgage. Accounts for opportunity cost — what the down payment would earn invested at 7%.

Last updated: April 23, 2026

Verdict at current rates

Renting wins (30-year horizon)

In Lexington at KY's tax rates and current 6.8% mortgages, keeping the down payment invested at 7% beats homeownership even after 30 years. The standard advice "buy to build equity" doesn't apply here at today's price-to-rent ratio.

Monthly Cost Breakdown

Buying

$2,104/mo

Mortgage P&I

$228,000 loan, 30yr @ 6.8%

$1,486

Property tax

0.83% of assessed (KY avg)

$197

Homeowners insurance

$2,200/yr KY avg

$183

Maintenance

1%/yr of home value

$238

Cash at close: ~$64,125 ($20% down + fees)

Renting

$1,350/mo

2BR rent (median)

Lexington market rate

$1,350

Renters insurance

~$15/mo typical

$15

Down payment invested

$57,000 growing at 7%/yr

(opportunity cost)

Monthly gap: $754 cheaper than buying. Renter invests that difference.

Year-by-Year Net Position

"Buy wins by" = what you'd clear selling the home minus what the renter has in investments. Positive = buy ahead.

YearHome valueBuyer equity (net)Renter portfolio (net)Buy wins by
Year 5$330,393$-89,544+$43,085$-132,628
Year 10$383,016$-136,036+$35,982$-172,018
Year 15$444,021$-166,232+$40,412$-206,644
Year 30$691,770$-80,882+$218,672$-299,554

Assumptions

Every rent-vs-buy calculator depends on the assumptions. Here are ours — all transparent, none cherry-picked to bias the answer.

Home price$285K (Lexington median)
2BR rent$1,350/mo (Lexington median)
Down payment20%
Mortgage rate6.8% 30-yr fixed (current market)
Property tax0.83% (KY effective avg)
Insurance$2,200/yr (KY avg)
Maintenance1%/yr of home value
Home appreciation3%/yr
Rent growth3%/yr
Investment return7%/yr (S&P real, long-term avg)
Buy closing costs2.5% of home value
Sell closing costs6.0% (realtor + transfer)

This is a rule-of-thumb calculator. Real decisions involve your specific tax bracket, any HOA, mortgage points, closing-cost negotiations, and exact loan terms.

Frequently Asked Questions

Is it better to rent or buy in Lexington?

In Lexington at current mortgage rates (6.8%), renting and investing the down payment beats buying for the full 30-year horizon. Median monthly ownership costs ($2,104) well exceed median 2BR rent ($1,350), and KY's 0.83% property tax makes the math especially tough.

What's the monthly cost of owning a home in Lexington?

On a median $285K home with 20% down at 6.8% fixed rate: mortgage P&I $1,486, property tax $197 (0.83% of assessed value), homeowners insurance $183 (KY average $2,200/year), and maintenance $238 (1% of home value/year). Total: $2,104/month.

How much down payment do I need to buy in Lexington?

20% down on a median Lexington home ($285K) is $57,000. Plus closing costs of roughly 2.5% ($7,125). Total cash-to-close: about $64,125. FHA loans allow 3.5% down ($9,975) but require mortgage insurance that adds ~$111/month.

What's the 10-year cost of renting vs buying in Lexington?

Over 10 years in Lexington: renters pay $185,715 in cumulative rent but have $221,697 invested (assuming 7% return on the $57,000 down payment + monthly savings). Buyers have paid $301,349 in total ownership costs and hold $188,294 in home equity. Net: renting is ahead by $172,018 at year 10.