When comparing rent and purchase side by side, the significance of buying your first home in Lexington becomes clear. According to Zillow, the average home value in Lexington is $1,626,916. This figure is as of May 31, 2026, and has increased by 2.1% compared to the previous year (Zillow). Considering that a three-bedroom rental in the same area is around $4,000 per month, the monthly expenses for both renting and buying are not significantly different. The difference lies in whether that money builds equity.

Let's follow a hypothetical scenario starting with a budget of $1,626,916. If you prepare a 20% down payment, which is $325,383, you would finance the remaining $1,301,533 with a loan. The current average fixed interest rate for 30 years is around 6.6% (ranging from 6.55% to 6.72%, Freddie Mac PMMS, as of July 2026). With these conditions, the principal and interest would be about $8,300 per month. Applying the average effective property tax rate in Massachusetts of 1.11% (propertytaxrates.org, as of 2026), the annual property tax would be $18,059, which adds approximately $1,505 per month.

If saving 20% is challenging, there are other options. An FHA loan can start at 3.5% with a credit score of 580 or higher, which would be $56,942 (10% for scores between 500-579, fha.com). Conventional loans may also be available starting at 3% for first-time homebuyers or those with an income below 80% of the area median, though typically they proceed at around 5%. However, if you put down less than 20%, PMI will apply, and it will be removed once you reach the 20% threshold (nerdwallet.com).

Your credit score directly affects the interest rate. A score above 780 corresponds to 6.59%, in the 760s it's 6.66%, in the 740s it's 6.75%, and in the 700s it's 6.91% (themortgagereports.com, early July 2026). A difference of a few points can lead to tens of thousands of dollars in interest over 30 years, so it's advisable to check your score and pay down credit card balances before applying.

Getting pre-approved can significantly enhance your position when making an offer. Lenders often require the last two years of W-2s and tax returns, recent pay stubs for 2-3 months, bank statements, and identification. Having a pre-approval letter can make sellers view the transaction as more likely to succeed.

Closing costs also need to be accounted for separately. These can range from 2% to 5% of the loan amount, which means for a $1,301,533 loan, it could be between $26,000 and $65,000. This includes appraisal fees, title insurance, attorney fees, and escrow setup costs. In Massachusetts, it is customary for an attorney to be involved in the closing process, so this cost should be considered separately.

For first-time homebuyers who find saving for a down payment burdensome, it may be worth looking into MassHousing's down payment assistance program, which can provide up to $30,000, subject to income limits and loan product conditions (masshousing.com). Application requirements change annually, so it's best to check directly with an approved lender.

You can also choose between fixed and adjustable-rate mortgages (ARMs). A 30-year fixed mortgage maintains the same monthly payment, but the initial rate is slightly higher, while an ARM has a lower initial rate for the first 5-7 years but fluctuates based on market rates thereafter. For families planning to stay long-term in areas like Lexington, a fixed-rate mortgage may be a more stable choice. In fact, many Korean families looking to settle in this neighborhood prioritize school districts and long-term residency.

Once an offer is accepted, escrow opens, followed by home inspections and appraisals. If structural or equipment issues are found during the inspection, price renegotiation or repair requests can be made. Skipping this process can lead to larger costs later, so it's advisable not to overlook it, even in a busy market.

Deciding whether to remain renting or transition to buying ultimately requires applying these numbers to your income and savings rate. This article does not constitute investment or legal advice, and it is recommended to consult with a loan officer and real estate professional before finalizing any contracts.