Rent vs Large Deposit: Which Saves More?
Choosing between paying a large upfront deposit (like a Korean jeonse) versus monthly rent isn't as simple as comparing monthly payments. You must factor in the opportunity cost — the interest or returns you give up by tying your money in a deposit instead of keeping it invested.
For example, a $50,000 lump-sum deposit at a 4.5% savings rate costs $4,500/year in lost interest. Compare that to $1,500/month rent ($18,000/year). In this case, monthly rent is clearly more expensive — but the math shifts when deposit sizes or rates change.
Use this calculator to compare your specific numbers. Higher interest rates favor monthly rent; lower rates favor the large deposit option.
Frequently Asked Questions
Use a high-yield savings account rate or the rate you'd realistically earn investing the deposit. In 2025, US high-yield savings accounts offer around 4–5% APY.
Yes. Even $2,000 tied up as a security deposit for monthly rent has an opportunity cost. This calculator includes it so your total cost comparison is accurate.