Quick answer
At current rates, renting wins over the full 30-year horizon in Tempe. Monthly ownership cost $3,585 (vs $$1,850/mo rent) plus AZ's 0.63% property tax make the math tough.
Rent vs Buy · AZ
Rent vs Buy in Tempe (2026)
Real math using AZ's 0.63% property tax rate, $2,000/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 Tempe at AZ'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
$3,585/mo
Mortgage P&I
$416,000 loan, 30yr @ 6.8%
$2,712
Property tax
0.63% of assessed (AZ avg)
$273
Homeowners insurance
$2,000/yr AZ avg
$167
Maintenance
1%/yr of home value
$433
Cash at close: ~$117,000 ($20% down + fees)
Renting
$1,850/mo
2BR rent (median)
Tempe market rate
$1,850
Renters insurance
~$15/mo typical
$15
Down payment invested
$104,000 growing at 7%/yr
(opportunity cost)
Monthly gap: $1,735 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.
| Year | Home value | Buyer equity (net) | Renter portfolio (net) | Buy wins by |
|---|---|---|---|---|
| Year 5 | $602,823 | $-147,163 | +$143,851 | $-291,014 |
| Year 10 | $698,837 | $-213,195 | +$217,059 | $-430,254 |
| Year 15 | $810,143 | $-246,500 | +$339,813 | $-586,313 |
| Year 30 | $1,262,176 | $-2,277 | +$1,289,921 | $-1,292,198 |
Assumptions
Every rent-vs-buy calculator depends on the assumptions. Here are ours — all transparent, none cherry-picked to bias the answer.
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 Tempe?
In Tempe at current mortgage rates (6.8%), renting and investing the down payment beats buying for the full 30-year horizon. Median monthly ownership costs ($3,585) well exceed median 2BR rent ($1,850), and AZ's 0.63% property tax makes the math especially tough.
What's the monthly cost of owning a home in Tempe?
On a median $520K home with 20% down at 6.8% fixed rate: mortgage P&I $2,712, property tax $273 (0.63% of assessed value), homeowners insurance $167 (AZ average $2,000/year), and maintenance $433 (1% of home value/year). Total: $3,585/month.
How much down payment do I need to buy in Tempe?
20% down on a median Tempe home ($520K) is $104,000. Plus closing costs of roughly 2.5% ($13,000). Total cash-to-close: about $117,000. FHA loans allow 3.5% down ($18,200) but require mortgage insurance that adds ~$203/month.
What's the 10-year cost of renting vs buying in Tempe?
Over 10 years in Tempe: renters pay $254,498 in cumulative rent but have $471,558 invested (assuming 7% return on the $104,000 down payment + monthly savings). Buyers have paid $514,819 in total ownership costs and hold $343,554 in home equity. Net: renting is ahead by $430,254 at year 10.