Rent vs buy in Madison, AL
In Madison, Alabama, typical monthly rent is $1,411 and the typical home price is $376,486.
Over 7 years, renting comes out $71k ahead
Based on Madison's typical rent and home value, this uses 20% down and today's mortgage rate. There is no break-even within 30 years.
Clearly labeled opinion with the calculations shown. These figures are estimates, not quotes. The stamp changes whenever you change a number.
- How far renting is ahead
- $71k after 7 years
- Break-even point
- 30+ years owning never catches up sooner
- Full cost of ownership
- $3,196 /mo year 1, against $1,411 rent
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For the calculation, the stamp takes Madison's typical rent and the city's typical home value. Your rent, price and time period can change the result.
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Is renting or buying cheaper in Madison?
Across 7 years, renting saves $71,001 after counting the money returned to you when you sell. For every year shown, renting's net cost is lower than owning's. Even within 30 years, owning never catches up.
Rent. Ownership. Cumulative net cost by year.
Average rent compared with a mortgage payment in Madison
Rent and a mortgage don't show the full cost, so here are all monthly expenses for year 1 at Madison's typical price.
| Each month, year 1 | Amount | What it is |
|---|---|---|
| Rent | $1,411 | All of it, every month |
| Mortgage payment | $2,053 | $1,809 of it is interest in year 1 |
| Property tax | $157 | 0.5% of the value a year |
| Insurance | $147 | Census median for the city |
| Upkeep | $314 | 1% of the value a year |
| Owning, cash out | $2,670 | $243 of it builds equity |
| Lost return on the down payment | $612 | What the cash would earn yearly at 8.3% |
| Buying costs, spread out | $157 | 3.5% of the price over 7 years |
| True cost of owning | $3,196 | Cash paid, minus the equity portion, plus the two amounts above |
The figures behind Madison's result
- Typical home valueZillow ZHVI, September 2026
- $376,486
- Typical rentZillow ZORI, September 2026
- $1,411 /mo
- Down payment20% avoids private mortgage insurance, which the engine does not model
- 20%
- Mortgage rateFreddie Mac Primary Mortgage Market Survey (FRED MORTGAGE30US)
- 7.24%
- Home price growthFHFA house price index, Alabama, 1995 to 2025
- 3.7% a year
- Rent growthCPI rent of primary residence, yearly growth 2006 to 2026
- 3.5% a year
- Return on savings60% S&P 500 with dividends and 40% 10-year Treasuries, rebalanced yearly, 1928 to 2025
- 8.3% a year
- Property taxCensus ACS 2020-2024, Madison
- 0.5% of value
- Home insuranceCensus ACS 2020-2024, Madison
- $147 /mo
- MaintenanceFannie Mae, low end of 1% to 4%
- 1% of value a year
- Buying costsFreddie Mac, middle of 2% to 5%
- 3.5% of price
- Selling costsAgent commission plus closing costs
- 6% of price
What would reverse the result in Madison?
For Madison, each line marks the point where the 7-year verdict changes. Everything else remains as it is.
Renting comes out ahead when
- We use 3.7% for Alabama's long-run rate. For this calculation, home prices grow more slowly than 6.0% a year.
- The mortgage rate remains higher than 3.85%.
- A similar home rents for under $2,170 a month, compared with the typical $1,411 here.
- You move at any time during the next 30 years, and owning never catches up at these figures.
Buying comes out ahead when
- Home prices rise by more than 6.0% each year.
- You secure a mortgage rate under 3.85% (today's is 7.24%).
- If you rented the same home, the monthly cost would exceed $2,170.
Madison compared with the other 812 cities
| Measure | Madison | Median city |
|---|---|---|
| Typical home value | $376,486 | $422,451 |
| Typical rent | $1,411 /mo | $1,837 /mo |
| Price-to-rent ratio | 22.2 (#234 of 813) | 18.5 |
| Home prices, last 10 years | 5.7% a year | 6.2% a year |
| Rents, last 5 years | 1.2% a year | 4% a year |
| Property tax | 0.50% | 0.87% |
| Households that rent | 26% | 42% |
Sources: Zillow ZHVI and ZORI, Census ACS 2020-2024.
More cities in Alabama
- Rent. Huntsville, AL. Here, renting comes out ahead by $30k.
- Buy. Mobile, AL. Here, buying comes out ahead by $5k.
- Buy. Birmingham, AL. Here, buying comes out ahead by $44k.
- Buy. Montgomery, AL. Here, buying comes out ahead by $38k.
- Buy. Tuscaloosa, AL. Here, buying comes out ahead by $26k.
- Rent. Hoover, AL. Here, renting comes out ahead by $113k.
- Auburn, AL favors renting by $65k.
- Toss-up. Dothan, AL. Buying leads by $2k, so it's a toss-up.
- Rent. Decatur, AL. Renting comes out ahead by $22k.