Own vs. Rent Help
This calculator is useful in estimating the "real" cost of first year
home ownership, and comparing it with your yearly cost for renting.
It factors in "other" home ownership costs such as
insurance, as well as the tax savings you get from paying interest on your
home loan.
How to use this calculator....
Enter values by tabbing between fields. You can change all, some or none of
the default values in the
Variable Fields
column before pressing the Calculate button.
Field Descriptions
Sale Price of Home: The price which you anticipate paying for your home.
Percent (%) or $ Amount Down: Home purchasers typically put between 10 and
20 % down on a home purchase. To enter a dollar amount instead of a
percentage, enter the dollar amount and then select the second button by
clicking in it.
Term of Loan: A home loan is typically given for a period of years such as 30.
Interest Rate: The interest rate you anticipate contracting for when you take out
your home loan.
Annual Property Taxes: Estimated Annual Propety Tax assessed for the
home you wish to purchase.
Annual Home Insurance Premium: Yearly cost for Home Insurance.
Annual Home Association Fees: If there is a home association fee
for your home enter that value, otherwise enter a 0.
Annual Home Maint/Repair: Enter an estimate for any maintenance or repairs
you may spend on this home (that you otherwise would not spend).
Homeowner's State + Fed. Tax Rate Enter the income tax rate (a percentage of 100)
of the homeowner/s (combined household. This is used to estimate the tax savings
you will recieve from paying mortgage interest.
Dollar Amount Financed: The amount you will actually be taking a loan out for.
This is based on the Sale Price of the house less the percentage or dollar
amount you will put down at the time of purchase.
Monthly Payment: Simply monthly mortgage payment based on above information.
Annual Loan Cost: Calculated from same information as the Monthly payment (Sale Price,
Money Down, Loan Term and Interest Rate), but multiplied by 12 to get the yearly cost.
First Year Mortgage Int: Estimated interest you will pay the first year
on your Home Loan.
Tax reduction for Int: Based on the result of the calculation for first
year interest, and the Tax Rate you enter on the left, an estimate is calculated for
the amount you will be able to deduct on your income tax return.
ANNUAL SAVINGS OR EXPENSE(-) OF HOME OWNERSHIP: A positive number in this
field indicates the amount of money you will save in the first year of home
ownership. A negative number, indicated by a "-", is additional yearly cost
of purchasing this home.