Rent vs. Buy Calculator: Is It Better to Buy in Madison, WI?
Pre-filled with Madison, WI's median home price ($420,000), local property tax rate (1.6%), and an estimated equivalent rent — adjust any number to match your specific situation.
Median home price
$420,000
Property tax rate
1.6%
Est. equivalent rent
$1,800/mo
Price-to-rent ratio
19×
Your situation
Buying wins over 10 years
Saves you $58,399 vs the alternative · breaks even in year 6
💡 What if the down payment was invested instead?
Adds a purple line: rent + $84,000 growing at 8%/yr
Net cost of buying
$189,221
Total cost renting
$247,620
Share in r/personalfinance, r/FirstTimeHomeBuyer, or Twitter 🏡
Assumes 30-year fixed mortgage, 3% closing costs, 1% annual maintenance, 7% selling costs. For educational purposes only — consult a financial advisor.
Compare another market:
Wisconsin taxes and what they mean for your decision
Wisconsin has a top state income tax rate of 7.65%, and Madison's property tax rate of 1.6% is well above the national average — a higher combined tax environment relative to many comparable college-town metros.
The Madison, WI rental market
Madison's rental market is dominated by the University of Wisconsin, creating strong, predictable demand that keeps vacancy rates consistently low — particularly in neighborhoods close to campus and the Capitol Square.
What makes Madison different
Madison's home prices have risen significantly relative to peer markets driven by the university, state government, and a growing biotech and software sector. Despite above-average taxes, the combination of strong demand and limited supply has compressed the price-to-rent ratio meaningfully in recent years.
Madison, WI's price-to-rent ratio: 19×
Dividing the median home price by annual rent for an equivalent home gives the price-to-rent ratio — a quick screening tool used by economists and real estate analysts. A ratio below 15 generally favours buying, 15–20 is a genuine toss-up, and above 20 generally favours renting, all else being equal. Madison, WI currently sits at approximately 19×, putting it squarely in toss-up territory where your specific time horizon and risk tolerance matter more than the market average.
| Metric | Madison, WI |
|---|---|
| Median home price | $420,000 |
| Estimated equivalent monthly rent | $1,800 |
| Property tax rate | 1.6% annually |
| State income tax | Wisconsin state tax applies |
| Price-to-rent ratio | 19× |
These are metro-level estimates for illustration. Use the calculator above with your specific neighborhood, property, and rental comparison for an accurate result.
Compare other major metros
📍 New York, NY
$780,000 median · 1.7% property tax
📍 Los Angeles, CA
$950,000 median · 0.7% property tax
📍 Chicago, IL
$350,000 median · 2.2% property tax
📍 Houston, TX
$320,000 median · 2.3% property tax · no income tax
📍 Austin, TX
$820,000 median · 2.1% property tax · no income tax
📍 Seattle, WA
$850,000 median · 1% property tax · no income tax
Related financial planners
Madison, WI rent vs buy — frequently asked questions
Is it better to rent or buy in Madison, WI?
It depends heavily on your time horizon and the specific numbers. Madison, WI's current price-to-rent ratio of approximately 19× suggests the decision is genuinely close and depends on your specific situation. Use the calculator above with your specific home price, down payment, and time horizon for a precise answer.
What is the median home price in Madison, WI?
The median home price in Madison, WI is approximately $420,000, though prices vary significantly by neighborhood and property type. This calculator uses the metro median as a starting point — adjust it to match the specific property you are considering.
What are property taxes like in Madison, WI?
Madison, WI has an effective property tax rate of approximately 1.6% of assessed home value annually. This is close to the US national average of roughly 1.1%.
Does Wisconsin have a state income tax?
Yes. Wisconsin levies a state income tax, which is a relevant factor when comparing overall cost of living, though it applies equally whether you rent or buy and does not directly affect the rent vs buy math itself.
How long do I need to stay in Madison for buying to make sense?
Based on Madison, WI's current price-to-rent ratio of 19×, the typical break-even point — accounting for closing costs, selling costs, and the opportunity cost of the down payment — generally falls in the 5-to-7-year range for this market. Run the calculator above with your specific numbers and time horizon for an exact figure.