You entered 25.000% as your income tax rate. Most taxpayers do not itemize their tax returns and use standard deductions. If you are taking standard deductions then enter zero as your federal tax rate to remove the mortgage interest deduction from your income tax calculations. Standard deductions for 2021 are shown in the table below.
Is it financially better to buy a home or to rent? The answer to this question depends upon how much the home costs, how much you are paying for rent, and how much you will have to pay each year in order to maintain your home.
If you were to pay $1200.00 per month, for example, and the average rental payment increase was 3.000%, you would pay $110,339.46 in a 7 year period toward rent. If you purchased a home and borrowed $250000.00 with a 3.250% interest rate, and you paid $2000.00 every year toward its maintenance, you would pay $136,893.33 in a 7 year period toward mortgage payments if your Federal tax rate is 25.000%, you pay $3000.00 in taxes each year and your annual insurance rate is $1500.00.
When you consider your tax benefits and the appreciation of your home, however, you will actually SAVE money by purchasing a home. If your home shows an annual appreciation of 5.000% and your selling cost is 6.000%, your house appreciation value will be $439,718.88. As a result, your total home purchase benefit will amount to $181,358.59.
Rent or Buy Mortgage Calculator
Are you currently renting and considering buying a home? Use this free online calculator to compare the financial costs and benefits of each option. This calculator considers rent appreciation, real estate appreciation, income tax deductions, and real estate transaction costs.
For your convenience current mortgage rates are published underneath the calculator to help you make accurate calculations reflecting current market conditions.