The Rent versus Buy Calculator will help people who are trying to decide whether to keep renting their home
House information
- Appraised value? The appraised market value of the house
- Tax value? The assessed tax value of the house
- Price? The selling price of the house
- Annual property tax? The property tax rate as a percentage of the tax value
- Annual insurance? The amount that hazard insurance will cost per year
- Annual appreciation? The estimate of how much the house's appraised value will increase per year. Your real estate agent can give you some idea of the recent appreciation for houses in your area
Other info
- Annual rent increase? The amount you estimate your rent will increase each year
- Other monthly fees? Amounts you pay monthly for renter's insurance, clubhouse membership
- Return on investment? The amount you would earn if the down payment cash remained invested instead of being used for a house purchase
- Part of down payment borrowed? If any of the down payment is borrowed, enter the amount here.
Outputs>
- PITI payment? This is your total monthly payment for principal, interest, taxes, and insurance. It increases every 12 months because the tax value of the house, and the taxes you owe, go up each year
- PI payment? mortgage payment. It remains constant
- Principal payment
- Interest payment
- Effective PITI Payment? The PITI payment reduced by the amount of tax savings you realize from deducting your interest payments
- Balance? The amount owed on the mortgage after that month's payment
- Equity? The appraised value of the house minus the mortgage balance
- Rent Payment? The rent payment for that month, including any fees such as renter's insurance
- Earning Equity? The value of your investment. This assumes that you invest the cash that would have gone for the house down payment (the unborrowed portion) and then add, each month, the difference between your rent payment and the effective PITI payment you would be paying if you had bought a house
Month at which the buying equity exceeds the renting equity
is how long it will take you come out ahead financially if you buy a house