Rent vs buy in Montgomery, AL
In Montgomery, Alabama, typical rent is $1,305 /mo and a typical home is $149,943.
Over 7 years, buying comes out ahead by $38k.
The figures use Montgomery's typical rent and home value, plus a 20% down payment and today's mortgage rate. The break-even point arrives in year 3.
Clearly labeled opinion with the math shown. Estimates, not quotes. The stamp updates whenever you change a number.
- Owning is ahead by
- $38k after 7 years
- Break even point
- Year 3 when owning catches up
- What owning actually costs
- Each month: $1,315 year 1, against $1,305 rent
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The stamp relies on Montgomery's typical rent and home value. Rent, price and years chosen by you can flip it.
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Is it cheaper to rent or buy in Montgomery?
Over 7 years, buying costs $37,687 less after you count the money returned to you when you sell. Starting in year 3, owning's net cost is below renting's and remains there.
If you rent. If you own. Net cost to date, by year.
Average rent compared with mortgage payment in Montgomery
Rent and the mortgage don't tell the full story. At Montgomery's typical price, every monthly cost in year 1 is shown.
| Each month, year 1 | Amount | What it is |
|---|---|---|
| Rent | $1,305 | All of it, every month |
| Mortgage payment | $817 | $721 of it is interest in year 1 |
| Property tax | $50 | 0.4% of the value a year |
| Insurance | $113 | Census median for the city |
| Upkeep | $125 | 1% of the value a year |
| Owning, cash out | $1,105 | $97 of it builds equity |
| Lost return on the down payment | $244 | At 8.3% a year, that's how much the cash would earn. |
| Buying costs, spread out | $62 | 3.5% of the price over 7 years |
| True cost of owning | $1,315 | Subtract the equity part from the cash out and add the two lines above |
Figures behind the verdict in Montgomery
- Typical home valueZillow ZHVI, September 2026
- $149,943
- Typical rentZillow ZORI, September 2026
- $1,305 /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, Montgomery
- 0.4% of value
- Home insuranceCensus ACS 2020-2024, Montgomery
- $113 /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 make the result go the other way in Montgomery?
The 7-year verdict in Montgomery flips at each point shown. Everything else stays as it is.
When renting comes out ahead
- Our benchmark is 3.7%, Alabama's long-run rate, when home prices grow by under 0.1% each year.
- For the mortgage, the rate stays above 11.65%.
- For a home like this, rent comes in under $900 a month (typical here: $1,305).
- Before year 3, you move.
When buying comes out ahead
- Home prices grow by more than 0.1% a year.
- Today's rate is 7.24%. You lock in one below 11.65%.
- The same home would cost over $900 each month to rent.
- You remain in the home for 3 years or longer.
How Montgomery compares with the other 812 cities
| Measure | Montgomery | Median city |
|---|---|---|
| Typical home value | $149,943 | $422,451 |
| Typical rent | $1,305 /mo | $1,837 /mo |
| Price-to-rent ratio | 9.6 (#794 of 813) | 18.5 |
| Home prices, last 10 years | 4.4% a year | 6.2% a year |
| Rents, last 5 years | 4.9% a year | 4% a year |
| Property tax | 0.40% | 0.87% |
| Households that rent | 46% | 42% |
Sources: Zillow ZHVI and ZORI, Census ACS 2020-2024.
More cities in Alabama
- Rent. Huntsville, AL. Renting is ahead by $30k.
- Buy. Mobile, AL. Buying is ahead by $5k.
- Buy. Birmingham, AL. Buying is ahead by $44k.
- Buy. Tuscaloosa, AL. Buying is ahead by $26k.
- Rent. Hoover, AL. Renting is ahead by $113k.
- Rent. Auburn, AL. Renting is ahead by $65k.
- Toss-up. Dothan AL. Buying leads by $2k, though the result is a toss-up.
- Rent. Madison AL. Renting has the edge by $71k.
- Rent. Decatur AL. Renting has the edge by $22k.