Buy a Home or Rent and Save?

We are all confronted at one point in your life between renting a place and buying a house. There are many advantages and disadvantages for both parts; some of the arguments are qualitative and others quantitative. Many people dream to become home owners and this is taking a huge place in the decision, but as for quantitative arguments, Credit Finance + give you the correct tools.

« Read the rest of the introduction to this calculator

Term

years

Buy a home

Cost of the propriety Cost of the house at the transaction

Cash down First cash down on the house		%
Total mortgage Amount borrowed from the bank to buy the house
Term The number of years on the mortgage loan		years
Rate Interest rate for the mortgage loan	%
Monthly payments Monthly payments to repay the mortgage

Welcome tax Tax imposes for the arriving of new owners
Notary cost Cost for the notary services to buy a home
Municipal taxes Annual municipal taxes for the town services		per year
Condo fees Annual condo fees for the building maintenance and other services		per year
Insurances Insurances for fire, theft and others.		per year
Unexpected expenses Problems related to plumbing, electricity, renovation, etc.		per year

Propriety value Value of the property
Renovations Cost of renovation
New value Increase value after the renovations
Annual appreciation % annual increase of the value of the house: pessimistic 1%, average 2% to 3%, optimistic 4% and more.	%
End of the term value

Total payments Total payments made to the bank	Total interests Total payments made in interest to the bank	Total capital Total payments made in capital to the bank

Rent and save

Term Number of years of renting and saving		years
Monthly rent Monthly rent amount on the first year
Annual increase rate Annual increase rate of the rent	%
Monthly savings Amount saved monthly which will be invested
Cash presently saved Amount already invested in the beginning
Rate of return Rate of return compound monthly on the investment, i.e. the interests are capitalized every month and reinvested 12 times a year	%

Results

	Buying	Renting
Non invested cash Buying: Amount spend excluding payments on capital in order to buy a house (interests, fees, taxes and unexpected expenses), also known as wasted money. Renting: Total payments made in rent, also known as wasted money.	$	$
Amount disbursed Buying: Total disbursement made to buy and maintain a house Renting: Total disbursement made to invest, including the rent.	$	$
Total gain Buying: Value of the assets at the end of the term Renting: Value of the investment at the end of the term.	$	$
Net profit / loss Buying: Value of the assets minus the total disbursement Renting: Value of the investment minus the total disbursement.	$	$
Rate of return Buying: Rate of return of the total investment Renting: Rate of return of the total investment	%	%

To learn more about this chart, please read the equity chart section in our introduction.