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Buying vs Renting Sample 1 |
Sample information based on a home purchase with a price of $139,900.
| Time Horizon |
5 Years |
% Down |
0% |
| Monthly Rent Payments |
$1,000 |
1st Mortgage Start Rate |
7.000% |
| Annual Rent Increases |
5% |
1st Mortgage Type |
30 Year Fixed |
| Home Appreciation |
5% |
MI Premium |
0.59% |
| Tax Bracket |
25% |
Property Taxes |
$3,750 |
| Purchase Price |
$139,900 |
Hazard Insurance |
$600 |
Rent Payments vs. Home Value for the First 5 Years.
| Year |
Monthly Rent |
Annual Rental Payments |
Home Value |
| 1 |
$1,000 |
$12,200 |
$146,895 |
| 2 |
$1,050 |
$12,600 |
$154,240 |
| 3 |
$1,103 |
$13,230 |
$161,952 |
| 4 |
$1,158 |
$13,892 |
$170,049 |
| 5 |
$1,216 |
$14,586 |
$178,552 |
| Avg. Rent |
$1,105 |
|
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Mortgage Payment Information.
| Primary Mortgage |
$931 |
| Mortgage Insurance |
$69 |
| Property Taxes |
$313 |
| Hazard Insurance |
$50 |
| Total Payment |
$1,362 |
| Avg. Amount of Tax Deductibility per Month over First 5 Years |
$277 |
| Tax Adjusted Payment |
$1,085 |
| Payment Difference Between Average Rent and Tax Adjusted Payment |
- $20 |
Overall Benefit to Owning.
| Current Home Value |
$178,552 |
| Mortgage Balance |
-$131,690 |
| Less Down Payment (if any) |
0 |
| Appreciation/Mortgage Reduction |
$46,862 |
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