How to use the rent buy-down calculator
Korea has a rental system called jeonse in which a tenant hands the landlord a very large refundable deposit and pays no monthly rent at all. Nothing like it exists in the United States. Here a security deposit is typically one to two months of rent, often capped by state law, and every tenant pays monthly rent on top of it.
The closest American equivalent is a rent buy-down: paying extra money upfront, as a larger deposit or as prepaid rent, in exchange for a lower monthly payment. The question is the same one a jeonse tenant faces, which is what return that parked cash is really earning. Divide the annual rent reduction by the upfront amount and you get the implied yield the landlord is paying you.
The calculator also subtracts the opportunity cost of not investing that cash elsewhere, and treats non-refundable prepaid rent differently from a refundable deposit. Figures are a September 2026 reference and all inputs are editable.
This tool is for general reference. Deposit caps, interest requirements and refund timelines are set by state and sometimes city law, and money held by a landlord carries credit risk. Review your lease and local landlord-tenant rules, or consult a tenant attorney, before paying a large sum upfront.
Frequently asked questions
No. Security deposits are usually one to two months of rent and many states cap them by statute. Handing a landlord a year or more of rent upfront is unusual and carries real counterparty risk.
Compare it to what the same cash would earn in a savings account or short-term treasury, then add a margin for the risk that the landlord cannot return it. If the implied return is below your alternative, keeping the cash is usually better.
That depends entirely on the lease and state law. Prepaid rent is often treated differently from a security deposit, so read the refund clause and check your state landlord-tenant rules before paying.