A

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Purchase or Rent Analysis

Inputs
Length of ownership/renting (years)
Personal interest rate (percent)

5
10.0%

Renting
Deposit (returned at departure)
Monthly payments (first year)
Monthly rent change each year
Renters insurance (monthly)

$1,200
$1,200
$25
$35

Purchase
Application/closing fees
Purchase price
Down payment percentage
Loan interest rate (percent)
Loan length (years)
Monthly insurance and tax
Monthly maintenance
Future selling price
Sales commission/fees (percent)

$2,000
$150,000
20.0%
7.0%
30
$200
$50
$160,000
7.0%

Calculations
Monthly mortgage payment
Mortgage balance at time of sale

$798.36
$112,957.91

Present Worth Analysis

Note: cash inflows are negative values; cash outflows are positive values

Renting
Deposit
Monthly payment (base)
Monthly rent change each year
Renters insurance
Renting total cost

Present Worth
$470.65
$56,478.44
$2,058.54
$1,647.29
$60,654.92

Purchase
Application/closing fees
Monthly mortgage payments
Down payment

Present Worth
$2,000.00
$37,575.25
$30,000.00

Monthly insurance and tax

Monthly maintenance
Equity in house
Sales commission/fees
Owning total cost
Present worth advantage:
Purchase Home

$9,413.07
$2,353.27
($28,591.65)
$6,807.23
$59,557.18

$1,097.75