Online Help for Real Estate Calculator Suite  :  Table of Contents

Rent or Buy Calculator

The Rent Or Buy Calculator is designed to help you make a sound financial decision regarding your housing options. There are times when paying rent for your housing does make good financial sense. However, based upon how long you intend to live in a particular area, purchasing may be a better (much better) option. This calculator will help you discover what may be best for you.

Current Monthly Rent: This is the amount of your current monthly rent payment.

Estimated Annual Rent Increase Percentage: This is the rate at which you expect your annual rent to increase.

Years Before You Will Move: Enter the number of years you expect to live here.

Total You Will Spend on Rent: This amount is calculated using your current monthly rent, how much you anticipate that it will increase over time and the amount of time you expect to rent.

Cash Available for Down Payment: This is the lump sum amount you can have available to pay as the down payment on a home.

Estimated Annual Return if Invested: If, during the time you rent, you invest the cash available for a down payment, enter the annual rate of return you expect you would receive on your investment. If you do not intend to invest the cash you have for a down payment, enter 0 in this edit box.

Value of Investment: The amount your cash available for a down payment will grow to if it is invested while you rent.

Interest Rate of Home Loan: This is the interest percentage your lender will charge to loan you money. This rate varies based upon national and personal factors. Your credit-worthiness is an important factor in the interest rate your lender will charge as is the length of the mortgage you desire and whether you pay discount points up front

Term of Home Loan in Years: This is the length of mortgage you wish to acquire. This will usually be 30 years, though some mortgages are for 15 years and, rarely, for 20 years.

Price of Home You Can Afford at Your Current Rent Payment: This is the price of a home calculated from what you currently pay each month in rent, the term of loan you desire and the interest rate you have entered.

Personal Income Tax Rate %: This includes your federal and state tax rates, for example, if you are in the 28% federal tax bracket and pay 5% state income taxes, enter 33% in this edit box. This is an important factor in the Rent Or Buy decision because the interest you pay for your home is tax-deductible!

Annual Real Estate Tax Rate: This is the percentage rate of real estate taxes you would pay if you purchase a home. This amount varies by location. Consult your real estate broker or agent for the rate in your area.

Total of Interest Deductions: This is the amount of money you would "receive" in the form of tax deductions if you purchase a home.

Property Appreciation Rate: Real estate tends to increase in value over time. Consult your real estate professional to determine the property appreciation rate for your area.

Appreciation of Property: This is the amount of value your property will gain based upon the property appreciation rate you enter.

Estimated Annual Home Maintenance Expenses: If you own your home, you will have maintenance expenses which you will not incur when renting.

Estimated Selling Costs as a % of House Value: When you sell a home you have purchased, you will be required to pay the expenses associated with the sell of the home.

Effective Gain of Owning: This is the calculated effective gain of owning. It is the value of your tax deductions + appreciation + equity + down payment (if you purchase it's converted into equity) minus the expenses of your payments + maintenance fees + property taxes + selling costs.

Actual Cost of Renting: The cost of renting is the amount of money you spend on rent minus the value of the return you receive on the cash you have available for a down payment.

Effective Gain of Owning vs. Renting: This is the Actual Cost of Renting subtracted from the Effective Gain of Owning.

Buy It Now!