Am I better off renting?
Show All Table Rows
Total cost at loan payoff or home sale
Year
Rent Total cost ($)
Own Total cost ($)
0
0
41,704
1
16,979
54,124
2
33,956
67,381
3
50,932
80,484
4
67,906
93,427
5
84,878
106,202
6
101,849
118,799
7
118,818
131,210
The total cost of each of your options is graphed above.
Note
that the amount of time which you own a home makes a significant difference. The
appreciation rate
, your tax bracket, the rate you earn on savings, and the potential maintenance are also very significant factors.
Total cost vs Appreciation rate
Appreciation rate (%)
Rent Cost ($)
Own Cost ($)
0.00
118,818
131,210
1.00
118,818
107,542
2.00
118,818
82,182
3.00
118,818
55,008
4.00
118,818
25,893
5.00
118,818
(5,299)
6.00
118,818
(38,716)
7.00
118,818
(74,514)
8.00
118,818
(112,860)
9.00
118,818
(153,933)
The higher your tax bracket, the more advantageous it is to own, provided that you are able to deduct
mortgage interest
.
Rent vs. Own
Tax rate (%)
Rent Cost ($)
Own Cost ($)
15.00
118,818
154,066
20.00
118,818
147,988
25.00
118,818
141,909
30.00
118,818
135,830
35.00
118,818
129,751
40.00
118,818
123,671
45.00
118,818
117,592
50.00
118,818
111,512
55.00
118,818
105,432
60.00
118,818
99,351