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Rent or Buy Calculator

Is it smarter to continue renting, or are you ready to buy?

This calculator will help you decide whether it makes sense to rent or buy a home.

Monthly Rent - Enter your current rent payment. Monthly Rent*:
Annual renters insurance - Enter how much you pay each year for renters insurance.
Mortgage loan amount - Enter the amount you plan to finance. For example, if you are buying a $300,000 home with a 20% down payment, your loan amount would be $240,000.
Interest Rate - Enter the interest rate that you will pay on your mortgage. You can find current rates from Freddie Mac at www.freddiemac.com.
Loan term - Enter the term you desire for your loan. Common terms are 15, 20 and 30 years.
Discount points - Discount points are paid upfront to obtain a lower interest rate. Typically, one point equals 1% of the loan amount and will lower your interest rate by .25 percent.
Closing costs - Closing costs include a loan origination fee, appraisal fee, title search and insurance, survey, taxes, deed recording fee, credit report charge, and other costs assessed at settlement. The closing costs usually are about 2% - 6% of the mortgage amount.
Annual property taxes - Including this information provides you with a better idea of the total cost of homeownership. Your real estate agent can help you estimate this cost, and some home listings may include this information.
Annual homeowners insurance - Most lenders require you to carry homeowners insurance. Including the information here provides you with a better idea of the total cost of homeownership.
Annual home maintenance costs - Enter an estimate of annual home maintenance costs. This will give you a better idea of the total cost of homeownership.
Annual homeowner's association dues - Many communities have mandatory homeowner's association dues. Including the information here provides you with a better idea of the total cost of homeownership.
Income tax rate - Most mortgage interest is tax deductible. By entering your tax rate, the calculator can take into account any money saved through the mortgage interest deduction. Consult a tax advisor to find out if the deduction applies to your situation. For 2009 the federal tax rates are 10%, 15%, 25%, 28%, 33% and 35%.
How many years do you expect to own this home? - There are up-front costs associated with buying a home. By estimating the years you plan to be in the home, the calculator can determine if you will be in your home long enough to recoup those costs.

Asterisk (*) indicates required fields.

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