It can be a tough decision whether to rent or buy a home. There’s a lot to consider: How long will you live there? How much of a down payment can you afford? What would be the length of your mortgage? What’s likely to happen to home and rent prices in your area?
The New York Times recently put together this calculator to help you make sense of the many costs associated with renting versus buying. It assumes that, if you rent instead of buy, you’ll put what would have been your down payment toward stocks or another investment.
For example, let’s say you’re looking to pay $200,000 for a house, and you plan to stay in it 10 years. You settle on a 30-year mortgage, with a 3.7-percent mortgage rate. Even with taxes, homeowner’s insurance, closing costs, the future cost of maintenance and utilities, and other considerations, you’d have to rent a similar home for $805 per month for renting to be a cheaper option.
Click here to get to the calculator. When you plug in the numbers, would you be better off renting or buying?
