Lease-to-Own Calculator

Calculate the true cost of a rent-to-own agreement including total payments, equity credits, remaining balance, and effective interest rate.

Purchase Price ($)

Monthly Rent ($)

Rent Credit (%)

Lease Term (months)

Option Fee ($)

Option Fee Credited (0 or 1)

Market Rent ($)

Tab to move between fields

Total Credits Earned

$21,200.00

≈ 11 gaming PCs

Remaining Balance at Purchase

$228,800.00

≈ 5 Teslas

Monthly Rent Credit$450.00

Total Rent Paid$64,800.00

Total Cost (Lease-to-Own)$298,600.00

Premium over Outright Purchase$48,600.00

Effective Annual Rate6.48%

Equity at Exercise8.48%

Total Premium Over Market$14,400.00

How to Use This Calculator

Enter the property purchase price ($) and the agreed monthly rent ($).
Set the rent credit percentage (the portion of rent that applies toward purchase).
Enter the lease term in months and the option fee ($) paid upfront.
Review total rent paid, total credits accumulated, and remaining purchase balance at end of term.
Compare remaining balance to current market value to assess whether the option is favorable to exercise.

How the result changes with Lease Term (months)

Lease Term (months)	Total Credits Earned	Remaining Balance at Purchase
13	$10,850.00	$239,150.00
43	$24,350.00	$225,650.00
78	$40,100.00	$209,900.00
108	$53,600.00	$196,400.00

Purchase Price ($): Agreed-upon future purchase price of the property or item.
Monthly Rent ($): Total monthly rent payment (typically above market rate).
Rent Credit (%): Percentage of monthly rent credited toward purchase price. Typical range: 15-35%.
Lease Term (months): Duration of the lease-to-own agreement. Commonly 24-60 months.
Option Fee ($): Upfront non-refundable fee for the purchase option. Typically 1-5% of price.
Option Fee Credited (0 or 1): Set to 1 if the option fee is credited toward purchase price, 0 if not.
Market Rent ($): Comparable market rent for similar properties. Used to calculate the rental premium you're paying.

Monthly Rent Credit: Amount credited toward purchase each month.
Total Rent Paid: All rent payments over the lease term.
Total Credits Earned: Total amount credited toward purchase (rent credits + option fee if applicable).
Remaining Balance at Purchase: Amount still owed if you exercise the purchase option.
Total Cost (Lease-to-Own): Complete cost including all rent, option fee, and remaining balance.
Premium over Outright Purchase: Extra cost compared to buying at the agreed price today.
Effective Annual Rate: Simplified effective interest rate implied by the lease-to-own premium.
Equity at Exercise: Percentage of purchase price covered by accumulated credits.

Identify Input Parameters
4 parameters
Purchase Price ($) = 250000, Monthly Rent ($) = 1800, Rent Credit (%) = 25, Lease Term (months) = 36 = 7 input(s) provided
Calculate Total Credits Earned
Total Credits Earned = totalRentCredits + optionFeeCredit
21200 = $21,200
Calculate Remaining Balance at Purchase
Remaining Balance at Purchase
228800 = $228,800
Calculate Monthly Rent Credit
Monthly Rent Credit = monthlyRent * (rentCreditPct / 100)
450 = $450
Calculate Total Rent Paid
Total Rent Paid = monthlyRent * leaseTerm
64800 = $64,800