Rent vs Buy calculator


Rent vs Buy calculator

"To use this "Buy vs. Rent" calculator, the cells highlighted in green can be modified (do not chang the other cells).  The cost to buy a home is often considered the sum of mortgage payments, home insurance, and property tax.  However, there are two other benefits of buying a home that does not exist w/ renting a home.  First, is the tax deduction of the mortgage interest.  Second, is the principal that is paid towards the mortgage loan, ie. building equity in your home.  Both of these benefits are subtracted from the PITI (principal, interest, tax, insurance) cost, to give you the "True Cost of Buying" a home, as indicated by the figure highlighted in Orange.  The savings/cost of Buying vs. Renting is summarized by the figure highlighted in Blue.  Lastly, another benefit of home ownership versus renting is the potential long term appreciation.  Assuming Bay Area real estate will continue to appreciate over the long-run (as it has historically), even a modest appreciation could generate substantial gain in the long run, as indicated by the figure highlighted in Yellow."

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