Rent vs buy in Paterson, NJ
In Paterson, New Jersey, the typical rent is $1,889 /mo and the typical home is $540,919.
Over 7 years, renting comes out ahead by $163k
The figures use Paterson's typical home value and typical rent, plus 20% down and today's mortgage rate. No break-even occurs within 30 years.
Clearly labeled opinion with the math shown. The figures are estimates, not quotes. The stamp updates when you change a number.
- Renting leads by
- $163k after 7 years
- When costs break even
- At least 30 years owning never catches up sooner
- Actual cost of ownership
- Per month: $5,523 year 1, against $1,889 rent
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Is it cheaper to rent or buy in Paterson?
Across 7 years, renting costs $162,735 less after counting the money returned to you when you sell. Across every year shown, renting has a lower net cost than owning. Buying won't make up the difference within 30 years.
Rent. Own. Running net cost by year.
Average rent compared with mortgage payment in Paterson
Year 1 at Paterson's typical price includes monthly costs beyond the rent and the mortgage, and they're all listed here.
| Each month, year 1 | Amount | What it is |
|---|---|---|
| Rent | $1,889 | All of it, every month |
| Mortgage payment | $2,949 | $2,599 of it is interest in year 1 |
| Property tax | $1,253 | 2.78% of the value a year |
| Insurance | $115 | Census median for the city |
| Upkeep | $451 | 1% of the value a year |
| Owning, cash out | $4,768 | $350 of it builds equity |
| Lost return on the down payment | $879 | What the cash would earn each year at 8.3%. |
| Buying costs, spread out | $225 | 3.5% of the price over 7 years |
| True cost of owning | $5,523 | Cash paid out, minus the equity portion, plus the two lines above |
Paterson verdict, by the numbers
- Typical home value, from Zillow ZHVI, September 2026
- $540,919
- Typical rent, from Zillow ZORI, September 2026
- $1,889 /mo
- A 20% down payment avoids private mortgage insurance. The engine doesn't model this cost.
- 20%
- Mortgage rate, from Freddie Mac Primary Mortgage Market Survey (FRED MORTGAGE30US)
- 7.24%
- New Jersey, 1995 to 2025 home price growth from FHFA house price index
- Each year: 4.7%
- Yearly growth in primary residence rent, 2006 to 2026: CPI rent of primary residence
- Each year: 3.5%
- Return on savings: 40% 10-year Treasuries and 60% S&P 500 with dividends, rebalanced yearly, from 1928 to 2025
- Each year: 8.3%
- Property tax source: Census ACS 2020-2024, Paterson
- 2.78% applies to the value.
- Home insurance source: Census ACS 2020-2024, Paterson
- $115 each month
- MaintenanceFannie Mae, the low end of the 1% to 4% range
- Each year: 1% of value
- Buying costs: Freddie Mac, from 2% to 5% at the midpoint
- Price basis: 3.5%
- Selling costsAgent commission and closing costs
- Price basis: 6%
Which changes could reverse Paterson's result?
For Paterson, each line shows the point where the 7-year verdict changes while all other values stay as they are.
Renting comes out ahead when
- Slower home price growth than 8.2% a year (our figure is New Jersey's long-run rate, 4.7%).
- The mortgage rate continues above 1.75%.
- A similar home rents for under $3,630 a month (the local typical rent is $1,889).
- Any time you move within the next 30 years, owning still won't catch up with these numbers.
Buying comes out ahead when
- Home prices increase by more than 8.2% a year.
- You lock in a mortgage rate under 1.75% (today's is 7.24%).
- Monthly rent for that same home would cost you over $3,630.
Paterson compared with the other 812 cities
| Measure | Paterson | Median city |
|---|---|---|
| Typical home value | $540,919 | $422,451 |
| Typical rent | $1,889 /mo | $1,837 /mo |
| Price-to-rent ratio | 23.9 (#169 of 813) | 18.5 |
| Home prices, last 10 years | 9.5% a year | 6.2% a year |
| Property tax | 2.78% | 0.87% |
| Households that rent | 73% | 42% |
Other New Jersey cities
- For Newark, NJ, renting wins by $74k, giving renting the advantage.
- Clifton, NJ, shows a $106k advantage for renting.