Rent vs. Buy

To buy or not to buy? We cannot decide for you, but we can help you decide. This calculator gives you an idea of prospect benefits or disadvantages a home ownership will impose on you.

Input Information
Rent Info
Monthly Rent : ($)
Annual Rent Increase : (%)
Property Information
Home Value : ($)
Annual Maintenance : ($)
Annual Appreciation : (%)
Years Remaining : (Yrs)
Selling Cost : (%)
Loan Information
Amount : ($)
Interest Rate : (%)
Length : (Yrs)
Points : (%)
Taxes And Insurance Information
Your Tax Rate : (%)
Annual Taxes :
Annual Insurance :
Annual PMI :
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Financial Analysis (Switch to Plain English)
  Rent Buy
Taxes and Insurance : $0.00 $22,500.00
Total PMI : $0.00 $3,229.17
Total Maintenance : $0.00 $4,500.00
Total Payments : $51,996.70 $110,752.41
Average Monthly Payment : $866.61 $1,845.87
Monthly Rent Savings : $979.26
Tax Savings : $0.00 $4,550.00
Total Rent Savings : $54,205.71
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 : $72,305.01
Plain English Help (Switch to Financial Analysis)

To buy or not to buy? This is the question that every tenant asks himself once in a while. The answer, of course, depends on the financial advantage (or disadvantage) the ownership of the property brings upon you, which is, in its turn, determined by the cost of the property, the rent you are paying and the home maintenance costs, paid by the owner.

If you are paying $800.00 per month, for example, and the average recent rental payment increase has been 4.000% and tends to stay that way, you will very likely spend $51,996.70 during the coming 5 year period on the rent. If you purchase a home, borrow $250,000.00 at 5.000% and pay $900.00 every year for the maintenance, you will spend $110,752.41 during the same 5 year period on your mortgage payments provided 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.

Considering 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 the 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 $72,305.01.