Rent vs. Buy You need to consider more than your monthly mortgage payment if you want to discover what makes more sense for you- to rent or to buy. To make a good financial decision, gather as many facts as you can. Use this calculator to help you sift through the various details that need to be considered to make a more informed financial decision.
To help you find the wiser choice, simply enter the requested data. If you have not been approved yet for a mortgage and do not have a good credit history, enter the highest interest rate advertised for the term you are looking at. Otherwise, if you have a good credit history, you can enter the better or lower interest rate. This calculator computes the difference between monthly rent and mortgage payment, the equity appreciation in the home, and the tax savings over the length of time that you listed for ownership.
Renting or owning a home is a personal choice that reflects, at least partially, how you want to live your life. Do you want to pay property taxes, keep up with maintenance costs, and pay premiums on homeowner's insurance? Maybe you do, because then you will also reap the benefit of tax savings and building equity in a home.
Perhaps you prefer the flexibility of being able to pick up and move frequently, then renting is the choice for you. For those of you who aren't sure what it is that you want, this calculator can at least put things into perspective for you. You can compare the cost of homeownership against the cost of renting.
Calculator Legend
- Purchase Price: Enter the amount that you will pay for the house, including costs.
- Loan Amount: Enter the actual dollar amount that you will be borrowing.
- Loan Term: Enter the number of years that you will hold the mortgage.
- Interest Rate: Enter the rate that is quoted with your mortgage. Enter it as a percentage. If you have not yet been approved for a loan, use the lowest interest rate advertised if you have good credit and the highest interest rate advertised if you have bad credit.
- Home Appreciates At: If you expect the home to appreciate in value, then you will enter the percentage that you expect the home to increase in value. If you expect the home to depreciate in value, then you will include a hyphen before the number you enter.
- Sell Home In: Enter the number that reflects how many years before you sell the home.
- Property Taxes: Use the current amount of property taxes for the home.
- Home Insurance: Enter the total cost of homeowner's insurance.
- Monthly Rent: Enter the going rate for rent.
- Rent Increases By: Enter the rate that you think the rental fee will increase in that time.
- Marginal Tax Rate: Enter the rate of your tax bracket.
- Inflation Rate: Enter the amount as a percentage that you believe inflation will rise.
DISCLAIMER: There is NO WARRANTY, expressed or implied, for the accuracy of this information or it's applicability to your financial situation. Please consult your own financial advisor.
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