Lease option calculator
Rent credits, effective purchase price, and whether the tenant-buyer will actually exercise.
How this works
A lease option is a rental agreement plus a separate option that gives the tenant the right — not the obligation — to buy the property at a locked-in strike price before the option expires.
A lease option is two agreements in one: a rental lease plus an option giving the tenant the right — not the obligation — to buy the property at a locked-in strike price before the option expires. Typical structure: nonrefundable option fee up front (1–5% of price), monthly rent slightly above market, with a portion credited toward the eventual purchase.
Worked example (seller view)
Home worth $340,000 today, agreed strike $365,000, 3-year option, $8,000 option fee, $2,400/mo rent with a $400/mo credit. Over 3 years: $86,400 rent + $8,000 fee collected. Credits accumulate to $14,400 (plus $8,000 fee if credited). If the buyer exercises, sale nets $365,000 − $14,400 = $350,600. If they walk, seller keeps the fee, all rent, and a house now worth ~$371,527 at 3%/yr appreciation.
Worked example (buyer view)
Same deal, from the buyer's side: effective price = $365,000 − $14,400 − $8,000 = $342,600. At 3%/yr the home is worth ~$371,527 — a small built-in equity cushion, and rent credits function as a forced savings plan for the down payment.
Edge cases: at 0% appreciation the strike is essentially a bet against inflation; if credits exceed a normal 10% down payment, some lenders won't count the excess (Fannie Mae only credits the portion above market rent). Confirm before signing.