Rhode Island example | Average 2-bedroom rental vs. average 2-bedroom home | January 2021 to January 2026
This page is built to make one question easier to picture: what may have happened over the same five years if one person kept renting while another bought a similar home?
The buyer side is modeled as a January 2021 purchase with 3.5% down and a 4.125% mortgage rate. The renter side uses January 2021 and January 2026 RIMLS rent averages, with 4.00% annual rent increases in between.
2021 Renter
Five years later, the renter mostly has a rent history, not housing wealth.
2021 Rent Payment
$1,510.76
2026 Rent Payment
$1,767.38
Estimated rent payments over 5 years
$98,193
Estimated wealth built after 5 years
$2,720
Net after 5 years of rent payments
-$98,193
In this example, rent rose steadily over five years, and those dollars mostly went toward housing rather than home equity.
Difference
How the two paths separated over five years.
2021 monthly edge
+$92.95/mo
2026 monthly gap
-$110.55/mo
5-year spending gap
-$407
Wealth built gap
+$166,835
5-year net gap
+$167,242
The renter started a little cheaper. By year 5, rent had climbed past the buyer's monthly payment, and the buyer had built more wealth through equity.
2021 Buyer
Five years later, the buyer may have spent nearly the same per month as the renter and still built wealth along the way.
2021 Mortgage Payment
$1,603.71
2026 Mortgage Payment
$1,656.83
Estimated mortgage payments over 5 years
$97,786
Estimated wealth built after 5 years
$166,835
Net after 5 years of mortgage payments
$69,049
Taxes, insurance, and PMI started around $477.18/mo and rose to about $530.30/mo by year 5.
Buying The Same Home Today
What changes when both are trying to buy the same roughly $475K home now?
That changes what each person may be able to do next. The renter may be buying from scratch with FHA financing and first-time-buyer help, while the homeowner may be buying again with equity already built.
Renter Buying Today
Even with Rhode Island Housing help, this buyer may still need fresh cash out of pocket to close.
Monthly Mortgage
$3,650/mo
More per month than the homeowner
+$745/mo
More per month than their 2026 rent payment
+$1,882.62/mo
Total down payment
$16,634
Total closing costs
$14,258
Cash due at closing
$30,892
Out-of-pocket cash needed to close
-$10,892
Even with assistance, this buyer may still need cash out of pocket to make the purchase work.
Homeowner Buying Again
After selling the first home, this buyer may be able to fund the next purchase with sale proceeds instead of starting from scratch.
Monthly Mortgage
$2,905/mo
Less per month than the renter
$745/mo less
More per month than their 2026 mortgage payment
+$1,248.17/mo
Total down payment
$95,000
Total closing costs
$27,326
Cash due at closing
$122,326
Kept in the bank after funding the new home purchase
$12,888.07
This version uses a $95K down payment and adds an estimated point-buydown cost into closing so the rate drops from 6.36% to 5.5%.
Interactive Graph
How equity starts to show up over time.
Month 60 of 60
Loading mortgage balance and value comparison...
Purchase price
Estimated value
Mortgage balance
This is the part many renters never get to see clearly: when you rent, your payment helps your landlord build equity. When you own, part of your payment may be reducing your own loan balance instead. As the home's value rises and the mortgage balance falls, that gap is the equity you may be building for yourself over time.
Methodology + Important Notes
This is an illustrative Rhode Island example. Data was pulled directly from RIMLS for November-January 2020-2021 and November-January 2025-2026. Only rentals and home sales under 100 DOM were included, and coastal and waterfront rentals and sales were excluded. The buyer side assumes a January 2021 purchase with 3.5% down, a 4.125% mortgage rate on the loan amount, RI property taxes at 1.25% growing 3.00% per year, homeowners insurance at 0.50% growing 5.00% per year, and flat PMI at 0.65%. The renter wealth estimate assumes any month where rent was lower than the modeled buyer payment was invested at a static 12.70% annual stock-market benchmark. Maintenance, repairs, utilities, selling costs, and other ownership expenses are not included unless stated. Appreciation and investment returns are illustrative, not guaranteed. This is educational information, not financial or tax advice.