A family living in Chicago recently did an interesting calculation. They wondered if their monthly rent could cover a mortgage. To cut to the chase, this calculation surprisingly holds true in many cases in Chicago.

Let's look at the numbers side by side. According to Zumper, the average rent in Chicago is $2,215 per month. This is a 1.4% increase from a year ago (as of August 2026). The average home value, according to Zillow, is $315,024, which is a 1.6% increase from a year ago. Both rent and home prices are rising at a similar pace.

The price-to-rent ratio combines these two numbers. Dividing $315,024 by $26,580 (which is $2,215 multiplied by 12) gives us 11.9. This is relatively low compared to other major cities for the same budget. Such a number is generally interpreted as a favorable signal for buying.

There's one more point to consider. While rent disappears every month, the principal portion of a mortgage payment remains as an asset. There are loan programs available that allow for less than a 20% down payment, but it's important to note that this will increase the monthly payment due to mortgage insurance.

When we move to actual mortgage calculations, this signal becomes clearer. Based on a 30-year fixed rate of 6.65% (Freddie Mac PMMS, as of August 20, 2026), if we assume a 20% down payment, the monthly principal and interest payment would be about $1,618. This is nearly $600 less than the current rent of $2,215. The initial calculation suggesting that rent could cover a mortgage aligns with the numbers.

However, we can't stop here. While the principal and interest alone may make buying seem advantageous, adding property taxes changes the equation. Illinois has one of the highest property tax rates in the country. With the same budget, many people often consider downtown condos versus suburban single-family homes. Downtown condos have fixed monthly maintenance fees, while suburban homes have relatively higher property taxes and maintenance costs. Both options may yield lower principal and interest compared to rent, but the nature of the additional costs differs and should be considered beforehand. Since the exact tax rate varies by district, it's best to check the actual property tax bill for any properties of interest.

It's also worth comparing sensitivity to interest rate changes. Currently, at 6.65%, the principal and interest payments are lower than rent, but if rates increase by just one percentage point, the payment will noticeably rise. In contrast, rent is fixed for the duration of the lease, so it is not immediately affected by interest rate fluctuations. Depending on whether you want to reduce monthly spending volatility or prioritize long-term asset building, the same numbers can be interpreted differently. If rates decrease further, the current gap in principal and interest could widen, so it's more stable to make decisions based on your financial situation rather than rushing to buy. It's also worth remembering that refinancing can be considered when rates drop.

If you have a down payment ready and plan to stay in Chicago for a long time, the current numbers lean towards buying. Conversely, if your stay is short or you might move to another city in the future, maintaining a rental may be more stable when considering closing costs and selling burdens.

Many Korean families tend to seek school districts located in the northwestern suburbs rather than downtown Chicago. While school ratings can be referenced from GreatSchools or Niche, school boundaries change frequently, so it's advisable to verify the assigned school for the specific address before signing a contract. This article is not investment or legal advice, and it's recommended to consult with a professional before making any actual agreements.