|
Buy vs. Rent Comparison
The
chart below shows a cost comparison for a renter and a homeowner over a
seven-year period.
●
The renter
starts out paying $800 per month with annual increases of 5%
●
The
homeowner purchases a home for $110,000 and pays a monthly mortgage of
$1,000
●
After 6 years,
the homeowner's payment is lower than the renter's monthly payment
With the tax
savings of homeownership, the homeowner's payment is less than the
rental payment after 3 years.
| years |
rent payment |
mortgage payment |
monthly
difference |
after-tax savings |
yearly difference |
after-tax savings |
|
1
|
800
|
1000
|
-200
|
-50
|
-2400
|
-600
|
|
2
|
840
|
1000
|
-160
|
-10
|
-1920
|
-120
|
|
3
|
882
|
1000
|
-118
|
+32
|
-1416
|
+384
|
|
4
|
926
|
1000
|
-74
|
+76
|
-888
|
+912
|
|
5
|
972
|
1000
|
-28
|
+122
|
-336
|
+1464
|
|
6
|
1021
|
1000
|
+21
|
+171
|
+252
|
+2052
|
|
7
|
1072
|
1000
|
+72
|
+222
|
+864
|
+2664
|
|
8-30
|
Savings
increase every year
|
Wouldn’t you
rather put your rent money
into your own home and build
equity in a secure investment? The
table below will show you how much you
will spend in rent over the course of time.
|
If your current
rent is:
|
1 year
|
5 years
|
10 years
|
15 years
|
|
$800
|
$9,600
|
$48,000
|
$96,000
|
$144,000
|
|
$900
|
$10,800
|
$54,000
|
$108,000
|
$162,000
|
|
$1,000
|
$12,000
|
$60,000
|
$120,000
|
$180,000
|
|
$1,100
|
$13,200
|
$66,000
|
$132,000
|
$198,000
|
|
$1,200
|
$14,400
|
$72,000
|
$144,000
|
$216,000
|
|
$1,300
|
$15,600
|
$78,000
|
$156,000
|
$234,000
|
|
$1,400
|
$16,000
|
$84,000
|
$168,000
|
$252,000
|
|
$1,500
|
$18,000
|
$90,000
|
$180,000
|
$270,000
|
|