Rent or Buy
Use this calculator to see the financial difference between renting or buying a home.
Renting Costs
Buying Costs
Purchase Costs
| Purchase price |
800,000
|
| Down payment percent |
7.50%
Down Payment
The minimum down payment for homes with a purchase price of $0 to $500,000 is 5%. For amounts over $500,000 an additional 10% down payment is required for each dollar over $500,000. For amounts over $1,000,000 a 20% down payment is required. |
| Down payment |
60,000
|
| Mortgage interest rate |
5.50%
Interest Rate
Enter the rate you will be paying on your mortgage. |
| Amortization (years) |
25
Amortization
Enter a value between 1 and 30 years.
Input Error
Must be less than or equal to 30 years. |
| Closing costs percent |
1.00%
Closing Costs
These are one-time fees buyers must pay when purchasing a home. These costs include, but are not limited to: land or property transfer taxes, lawyer fees and inspection fees (home inspection, property appraisal, title insurance) and prepaid property taxes, utility bills and other charges. |
| Closing costs |
8,000
|
Home Ownership Costs
|
Monthly
|
Annually
|
| Property taxes |
500
|
6,000
|
| Home maintenance |
600
|
7,200
Home Maintenance
This includes costs for repairs, upkeep, and improvements needed to maintain your home in good condition. Examples are fixing a leaky roof, painting, landscaping, and servicing appliances. Regular maintenance helps preserve the value of your property. |
| Home insurance |
100
|
1,200
|
| Utilities (monthly) |
500
|
6,000
|
| Condo fees (monthly) |
0
|
0
|
| Totals |
1,700
|
20,400
|
| Inflation rate |
2.00%
Inflation Rate
The inflation rate is used to calculate annual increases in property taxes, home maintenance, insurance and utilities. |
Home Appreciation
| How long do you plan to stay? |
15
How Long?
Enter the number of years you play on living in this home before selling it.
Input Error
Must be less than or equal to years. |
| Home appreciates at what rate per year? |
4.00%
Home Appreciation Rate
Enter the estimated annual increase in the value of your home. |
| Selling costs as a percent of future home value |
5.00%
Selling Costs
These include real estate commissions, legal fees, staging fees, moving expenses, repairs and renovations. |
Results
Financial Gain in Years
Rent
Buy
| Future Benefit of Renting in Years | ||||
| Rent | Buy | |||
| Monthly rent and mortgage payment | A | $2,000 | $4,698 | |
| Other monthly payments | B | $100 | $1,700 |
Other Monthly Payments
Other monthly payments under Rent are insurance. Other monthly payments under Buy are property taxes, home maintenance, insurance, utilities and condo fees. |
| Total monthly payment | A + B | $2,100 | $6,398 | |
| Total annual payment in year 1 | $25,200 | $76,711 |
Total Annual Payment in Year 1
Payments will increase each year because of rent increases and increases in property taxes, maintenance, utilities, insurance and condo fees due to inflation. |
|
| Total payments over years | $435,794 | $1,198,349 |
Total Payments
Payments will increase each year because of rent increases and increases in property taxes, maintenance, utilities, insurance and condo fees due to inflation. |
|
| Money saved from renting | $1,302,016 | |||
Future Benefit of Buying in Years |
||||
| Estimated home value | A | $1,440,775 | ||
| Less mortgage balance | B | $434,079 | ||
| Less selling costs (% of home value) | C | $72,038 | ||
| Home gain (A - B - C) |
(A - B - C) | $934,638 | ||
Summary |
||||
| Money saved from renting | $1,302,016 | |||
| Home gain | $934,638 | |||
| $367,378 | ||||
Table
Details
Assumptions
The financial gain from buying represents the projected value of your home when you sell minus any outstanding mortgage balance and selling costs. The financial gain from renting represents the accumulation of funds that would have been spent on homeownership costs if you had chosen to buy. This includes the down payment, mortgage insurance costs, and closing costs that are avoided by renting. It also includes the annual differences between the total cost of renting and the total cost of buying. If your rent payment (rent plus insurance) is less than the total cost of buying (mortgage payment, property taxes, maintenance, utilities, insurance, and condo fees), the annual savings from renting are added to your total savings. Conversely, if your rent payment exceeds the total cost of buying, the difference is subtracted from your total savings.The inflation rate is used to calculate annual increases in property taxes, home maintenance, insurance and utilities. If your down payment is less than 20%, the calculator includes the appropriate amount of mortgage insurance. If you enter a down payment less than the required minimum, the calculator adjusts this amount to the minimum.
Disclaimer
The financial gain from buying represents the projected value of your home when you sell minus any outstanding mortgage balance and selling costs. The financial gain from renting represents the accumulation of funds that would have been spent on homeownership costs if you had chosen to buy. This includes the down payment, mortgage insurance costs, and closing costs that are avoided by renting. It also includes the annual differences between the total cost of renting and the total cost of buying. If your rent payment (rent plus insurance) is less than the total cost of buying (mortgage payment, property taxes, maintenance, utilities, insurance, and condo fees), the annual savings from renting are added to your total savings. Conversely, if your rent payment exceeds the total cost of buying, the difference is subtracted from your total savings.The inflation rate is used to calculate annual increases in property taxes, home maintenance, insurance and utilities. If your down payment is less than 20%, the calculator includes the appropriate amount of mortgage insurance. If you enter a down payment less than the required minimum, the calculator adjusts this amount to the minimum.
Disclaimer
