Rent vs. Own

Writing out your monthly rent check have you scratching your head, wondering if making house payments would be a better investment?

Rent vs. Own

If your rental payment is $850 a month; you can purchase a $100,000 home with a mortgage payment of just $825.85 per month; that’s $24.15 less money per month than renting! After 5 years, your combined gain of buying a home vs. renting is $23, 835.24!

Rent vs. Own Full Comparison

Payment Considerations

Rent/Month Own/Month Own Financing Details
Initial Rent/Mortgage Payment $850.00 $491.48 Principal/Interest @ 4.5% 30-yr. fixed rate; 4.591% APR*
Renter’s Insurance vs. Insurance $60.00 Home Insurance
$74.37 Mortgage Insurance
Estimated Home Insurance required
Mortgage Insurance required with 3% down payment
Property Taxes $200.00 Estimated property taxes ($2,400 annual)
Before Tax Monthly Payment $850.00 $825.85 Before tax deduction – income taxes
Annual Home Maintenance $1,500 Estimated maintenance costs home annually
Total Payment Over 5 Years $52,030.25 $57,051.00
Total Tax Savings Over 5 Years $8,228.08 Assumes 25% personal income tax rate
Average After Tax Monthly Payment $867.17 $813.72  
Average Monthly Payment Savings   -$53.45 Savings Owning a home savings per month
Total Gain Over 5 Years $23,835.24 Total GAIN or savings owning a home over 5 years

Further Investment Considerations

Home Selling Price after 5 years $115,927.41 Assumes 3% per year home appreciation
Minus Loan Balance after 5 years -$88,423.50 Loan balance after 5 years repayment
Minus Down Payment and Initial Closing Costs with Unearned Interest -$6,876.00 $3,000 down payment, $3,876 closing costs includes prepaids and escrows
Investment Gain of Buying vs. Renting =$20,627.91
Total Payment Savings (Rent vs. Buying + -$3,207.33
Combined Gain of Buying vs. Renting $23,835.24

At WCCU Credit Union, we enjoy meeting with potential first time home-buyers – our well-seasoned mortgage lenders know the importance of helping you. From crunching numbers to comparing scenarios, our lenders can guide you through the process now or help you prepare for a purchase in the future.

To schedule a consultation with one of our lenders, contact any of our WCCU Offices.

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