This chart compares the total cost of buying a home to the total cost of renting an apartment over the same amount of time. It is assumed that the buyer/renter first moves in to their new home in year 0. Each point on the curves then represents the cumulative costs of living in that home/apartment through that date, at which point the buyer sells the house and the renter transfers control of the lease. Each curve can also be interpreted separately as the extra cost above living nowhere and keeping all of one's money invested in assets. All monetary values are expressed in terms of dollars in year 0. Try moving your cursor over the labels for a more detailed explanation of each field.
The monthly rent you pay to live in an apartment.
Cost of home at time of purchase.
Duration of your mortgage in years.
Annual interest rate on your mortgage.
Annual increase in the market value of your home.
Fees you pay to your condominium association as an annual percentage of your home value.
The rate on your Private Mortgage Insurance you pay as an annual percentage of your home value. This insurance is often required for buyers with a down payment of less than 20%.
The rate on your Property Insurance you pay as an annual percentage of your home value. This insurance provides coverage against property loss or weather-related damages, and is sometimes required, depending on the locality.
Monthly costs buyers incur that renters do not. These costs include remodeling, repair costs, or even extra utility charges.
The amount of your home that you pay upfront when you buy it, known as a down payment.
Costs incurred at time of purchase as a percentage of your home value. These costs may include attorney fees, appraisal fees, loan origination fees, etc.
Costs incurred at time of sale as a percentage of your home value. These costs may include realtor fees, home warranty fees, miscellaneous repairs, etc.
Annual local property tax rate. Local property taxes are usually deductible from your federal income taxes.
Number of months of rent your landlord charges as a security deposit when you first move in.
The rate on your Renters Insurance you pay as an annual percentage of a year of rent. This insurance provides coverage for personal property loss or damage when renting an apartment.
Annual increase in the rent you pay.
Expected annual inflation rate, which will increase the cost of utilities, condominium fees and home maintenance over time.
The annual return rate you receive by investing money into assets, whether they are stocks, bonds, mutual funds, etc. This determines your opportunity costs of spending money.
Monthly payments you make as either a renter or buyer to pay for utilities. These costs may include water, gas, electricity, or trash pick-up charges.
The number of years to show in the chart above. For values of 3 or less, the chart will display in terms of months.
The tax status under which you file your federal income taxes.
Your federal income tax rate. The higher the rate, the more money you will save through tax deductions.