Rent or Buy Calculator
The Rent or Buy Calculator allows you to estimate the costs of owning a home vs. the costs of renting.*
- Enter ballpark values by dragging the sliders left or right.
- Enter exact numbers by clicking in the box and type your number (no commas). The results of your calculations show in the box near the bottom of the calculator.
- Home price
- Enter the price of the home you wish to buy.
- Down Payment
- Enter the percentage of the home price you wish to pay as a down payment. The down payment, along with the price of the home will be used to figure out how much loan you will carry.
- Deductible Loan Costs
- A portion of the loan costs, such as points is deductible. Some lenders call this loan origination fees. Enter how many points you plan to pay for the loan. The points paid will increase the cost of owning. However, since it is deductible expense, your cost of ownership will be slightly lowered by your tax deduction.
- Loan Costs
- The nondeductible loan costs add to the cost of ownership.
- Loan Rate
- Enter the interest rate the lender will charge for the loan. The monthly payment, which can be determined from the interest rate and the loan amount, is a big part of the ownership cost of a home.
- Loan Term
- Enter the length of the loan you will get to buy your home.. This information will be used to determine the monthly payment, the tax deduction on the interest paid etc.
- Property Taxes
- Homeowners pay property taxes every year. The taxes will increase ownership costs, although, the deductibility of the taxes will reduce their overall cost slightly.
- Other Expenses
- Enter any annual nondeductible homeowner expenses you expect. These expenses will add to the home ownership costs.
- Years to Sell
- Enter the number of years you will keep the home before selling it. It will also be used as the base time period for renting vs. buying comparison costs.
- Annual Appreciation
- Enter the rate at which you anticipate the value of your home is going to grow. You may not enter a negative number. High appreciation will shrink the cost of owning a home.
- Selling Cost
- Enter the percentage of the selling price you will incur as costs. This will include the commission you may pay your realtor, any closing costs you pay towards the sale and any renovations you make to your house to help sell it. Minimizing these costs will reduce your ownership costs.
- Monthly Rent
- Enter the monthly amount you will have to pay for the home you want to rent.
- Rent Increases
- Enter the average percentage you anticipate your rent will increase every year.
- Tax Rate
- Enter your federal and state income tax rate. This figure will be used to compute the tax break you will receive for the interest you pay on your home loan. The tax break will reduce the ownership costs. In addition, the tax rate will also be used to reduce the savings you would accrue were you to invest the money used for a down payment were you to not buy a home.
- Savings Rate
- Enter the average yield on investments you make. Calculations assume that if you don’t buy a house, you would invest the money you would have used for a down payment, thus reducing the cost of renting.
- The results box compares the cost of renting to the cost of owning a home and shows which option saves you money.
*Calculators provided are estimation tools and do not necessarily reflect products, terms or rates that Home Federal Bank may offer. Please contact your Home Federal banker to verify results.