May 19th, 2014 6:59 PM by Landa Pennington
The total house payment would be approximately $1,508 per month. However, once you consider the equity build-up due to normal amortization, a monthly appreciation estimated at 2% annually for this example, the tax savings and paying maintenance that a tenant wouldn’t be required to do, the net cost of housing is $772 a month. This is almost half of the full mortgage payment.
If this person was paying $1,750 a month for rent, it would cost him almost $978 more to rent than to own. In the first year alone, it would accumulate to over $11,000 which is more than the down payment required of $7,000.
Owning a home is the largest investment that most people make and the down payment of $7,000 to purchase this home would grow to $58,837 in equity by estimating a 2% appreciation and normal amortization.
To check out what your real housing costs might look like, go to Rent vs. Own or contact your real estate professional.