Rent vs. Buy a Home Calculator

Published on Jun 01, 2015 07:07 pm

Is it always a waste of money to rent if you can afford to buy a home instead? Is buying a home the right housing move for everyone? Many factors can influence the decision to buy a house or continue renting, and you should weigh them all carefully before making a choice. Our Home Option Calculator can help you organize the financial variables and decide what path is best for you right now.

Rent vs. Buy Definitions

  • Annual appreciation rate — How much will your home gain in value each year you live in it? A local real estate agent can tell you what the anticipated rate is for your area, or you can check online resources.
  • Realtor fees — Buyers won’t have to pay realtor fees, but you will down the road when you sell your home. Realtors commonly ask for about 6% of a home’s selling price as their fee.
  • Closing costs — As a buyer, you will be responsible for paying closing costs. These are fees associated with finalizing the purchase of a house, and they can include a fee for processing the loan paperwork, inspection costs, appraisal and survey fees, title search and title insurance fees, escrow deposit, attorney fees and discount points.
  • Marginal tax bracket — Basically, this is the tax bracket you fall into based on your annual gross income and IRS tax rate schedules.
  • Before tax return on savings — Homeowners can usually deduct some of their property tax and mortgage interest from their federal taxes.
  • Assumed annual inflation rate — How much will the cost of everything — including the costs associated with owning a home — increase in a year? A high anticipated inflation rate could offset the cost benefits of home ownership.

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This article is provided for general guidance and information. It is not intended as, nor should it be construed to be, legal, financial or other professional advice. Please consult with your attorney or financial advisor to discuss any legal or financial issues involved with credit decisions.
Published by permission from, Inc., an Experian company. © 2015, Inc. All rights reserved.

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