Blog > What Every Military Family Should Know About BAH

What Every Military Family Should Know About BAH

by Brian J Kocsi

If you’re in the military, you already know your paycheck looks a little different. One of the biggest perks—and biggest mysteries—for a lot of families is BAH, or Basic Allowance for Housing.

BAH is tax-free money the military adds to your paycheck to help cover housing. The amount depends on three things:

where you’re stationed (yes, zip code makes a difference)
your rank and years of service
whether or not you have dependents

The Department of Defense updates BAH rates every January, and the idea is to cover about 95% of typical rent, utilities, and renter’s insurance in the area where the service member is stationed.

Here's Why That Matters

BAH isn’t just “extra money.” it can literally determine whether renting or buying makes sense for you. If your rent or mortgage costs less than your BAH, you get to keep the difference. If it costs more, you pay the extra out of pocket.

Here’s a Quick Example:

If you’re military in Lancaster or York County, you don’t have a specific BAH zone, so you’re grouped into a County Cost Group (CCG). York and Lancaster counties both fall under the CCG 860, which is used for areas where military population is low, but needs consistent BAH coverage.

Let’s say you’re an E-4 with dependents. Your BAH for this area in 2025 is around $2,230 per month.

In July of this year, the median home price in York County was $290,000 and the median home price for Lancaster County was $360,000. If you use a 30-year VA mortgage to purchase your home with today’s rates, your monthly principal and interest payments would be about $2,100 in Lancaster County and about $1,900 in York County (using the median prices). With these numbers, your BAH payment could cover your mortgage and more.

So instead of just covering rent, BAH can help you start building equity—something that sticks with you even after your next PCS.

A Few Things Most Families Don’t Realize

BAH is tax free, which makes it stretch further.
Once you’re locked in, rate protection means your BAH won’t drop if the market shifts (it can only go up).
In high-cost areas, you may also get a cost-of-living adjustment on top of your BAH.

What You Should Do Before Deciding To Rent or Buy

Find out your BAH numbers with the official calculator. 👉BAH Rate Lookup
Work with a local Realtor who is MRP certified. They can help you compare local rents and the cost of owning a home in the area. Don’t assume renting is always cheaper.
Plan long term—could a home purchase work as a rental if you get orders in a few years? Your Realtor can help you run the numbers for this, too.

Bottom Line