Buy vs Lease Calculator

Buy Vs Lease Calculator!

The biggest expense most people have is the place they live, one of the biggest decisions young people face is whether to buy their home, or continue to rent. Conventional wisdom says that buying will pay off in the long term, but believe it or not this is not always the case!

If you have used our Car Loan Calculator to see what kind of loan you can afford with your budget, you can use the same numbers you ended with there to get a great idea of where your personal cut-off would be between whether to Buy or Lease!

Once you know what kind of home you are getting, and how much you would have to pay a month, check out our Home Budget Calculator to build a budget around your expenses, and determine how much you are able to save every month!

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Take The Quiz!

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If reading this article was an Assignment, get all 5 of these questions right to get credit!

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1 of 5) For a home with a purchase price of $250,000, interest rate 4%, term: 25 years, property tax: 1%, home insurance: 0.5% and maintenance fees: $500 and an annual amortization, cash on hand $10,000, loan origination: 1%, points paid: 0 and other closing costs: $1,000. With monthly rent payment of $1,250, income tax rate of 20.1%, expected inflation of 3%, and home appreciation at 3%:
How much would your first net house payment be on a monthly basis?
2 of 5) For a home with a purchase price of $250,000, interest rate: 4%, term: 25 years, property tax: 1%, home insurance 0.5% and maintenance fees: $500 and an annual amortization. Cash on hand $10,000, loan origination 1%, points paid 0 and other closing costs $1,000. With an after tax return of 6%, income tax rate of 40%, expected inflation of 3%, home appreciation at 3% and future sales commission of 4%.

How much would your “monthly rent payment” have to be to equal your house payments?
3 of 5) Which of these options will almost always minimize the break-even point between buying and renting?
4 of 5) What does "Break Even" mean in this context? How long it takes to:
5 of 5) Why does renting become more attractive when after-tax investment return goes up?

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