Buying vs Renting Comparison

Still renting an apartment and thinking about a home purchase? This calculator can help you make the final decision.

Rent Info

Monthly Rent
%
Annual Rent Increase
%

Property Information

Home Value
$
Annual Maintenance
$
Annual Appreciation
%
Years Before Sell
years
Selling Cost
%

Loan Information

Amount
$
Interest Rate
%
Length
years
Points
%

Taxes And Insurance Information

Your Tax Rate
%
Annual Taxes
Annual Insurance
Annual Private Mortgage Insurance (PMI)
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  Rent Buy
Taxes and Insurance $0.00 $22,500.00
Total PMI $0.00 $5,489.58
Total Maintenance $0.00 $4,500.00
Total Payments $51,996.70 $113,012.83
Average Monthly Payment $866.61 $1,883.55
Monthly Rent Savings $1,016.94
Tax Savings $0.00 $4,550.00
Total Rent Savings $56,466.13
House Appreciation Value $382,884.47
Proceeds Minus Costs $356,082.56
Loan Balance $229,571.83
Equity Appreciation $126,510.73
Home Purchase Benefits $70,044.60

Is it financially better to buy a home or to rent? The answer to this question depends upon how much the home costs, how much you are paying for rent, and how much you will have to pay each year in order to maintain your home.

If you were to pay $800.00 per month, for example, and the average rental payment increase was 4.000%, you would pay $51,996.70 in a 5 year period toward rent. If you purchased a home and borrowed $250,000.00 with a 5.000% interest rate, and you paid $900.00 every year toward its maintenance, you would pay $113,012.83 in a 5 year period toward mortgage payments if your Federal tax rate is 26.000%, you pay $3,000.00 in taxes each year and your annual insurance rate is $1,500.00.

When you consider your tax benefits and the appreciation of your home, however, you will actually SAVE money by purchasing a home. If your home shows an annual appreciation of 5.000% and your selling cost is 7.000%, your house appreciation value will be $382,884.47. As a result, your total home purchase benefit will amount to $70,044.60.

Disclaimers: The information provided by these calculators is for illustrative purposes only. There is NO WARRANTY, expressed or implied, for the accuracy of this information or it's applicability to your financial situation. The default figures shown are hypothetical and may not be applicable to your individual situation. The calculated results are also intended for illustrative purposes only and accuracy is not guaranteed. There is not tax or financial advice given. Default and calculated tax data are for illustrative purposes only. Be sure to consult a tax or financial professional regarding your specific situation and before relying on the results.

Any hypothetical monthly mortgage payments reflect hypothetical Principal & Interest amounts rounded to the nearest dollar amount and may not include insurance, taxes, or other possible fees. These figures and rates are for educational purposes only and do not reflect an official mortgage loan offer.

We have many other Mortgage Calculators for you to use.

Make sure you register to receive my Free Homebuying Guide and Insider Mortgage Reports, browse my Resources section, fill-out a FREE No-Obligation Secure Online Loan Application, or call me in my Irvine, California office at 310.694.3544. I am here to help you with all your mortgage needs.


American Pacific Mortgage


Mike Bjork
Sr. Mortgage Planner
Corp NMLS #1850 | Originator NMLS #275652

Phone: 310.694.3544
Cell: 310.923.1884
Fax: 800.986.3155
Email: mike@mikebjork.com


100 Spectrum Center Drive, Suite 460 Irvine California, 92618


NMLS CONSUMER ACCESS LINK: NMLS #1850

Licensed by the Department of Business Oversight under the California Residential Mortgage Lending Act

© 2015 American Pacific Mortgage Corporation. All information contained herein is for informational purposes only and, while every effort has been made to insure accuracy, no guarantee is expressed or implied. Any programs shown do not demonstrate all options or pricing structures. Rates, terms, programs and underwriting policies subject to change without notice. This is not an offer to extend credit or a commitment to lend. All loans subject to underwriting approval. Some products may not be available in all states and restrictions apply. Equal Housing Opportunity.

The views, articles, postings, and information listed at this website are personal and do not necessarily represent the opinion or the position of American Pacific Mortgage Corporation.


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