Monday, June 4, 2007

Renting vs. Owning

Although some renters believe that renting is “maintenance free,” they are actually paying for maintenance in their rent – whether they need it or not. Renting offers you no equity, no tax benefit, and no protection against regular rent increases. If you’re paying rent, you’re really just paying someone else’s mortgage. Let’s compare.*

Rent Vs. Own

Monthly Payment
$1,000 vs. $855
$30 vs. $50
$0 vs. $260
MIP Insurance
$0 vs. $45
Total Payment
$1,030 vs. $1,210


Interest Deduction
$0 vs. $175
Tax Deduction
$0 vs. $75
After Tax
Net Monthly Payment
$1,030 vs. $960

* Approximate Payment/Cost Comparison based on estimated annual tax results. Based on 2.5 tax bracket and on estimated first year interest and taxes. Recommend consulting with tax expert. Payment based on FHA 30-year fixed rate loan with 7% interest rate, sales price of $125,000 and a loan balance of $121,250. Interest rate/rental rates, prices, terms, and availability subject to change without notice. See a qualified tax consultant for more details.

1 comment:

Torrie said...

i'm glad to be an owner, i find it has many advantages. but when i am feeling mad at the time, effort and money having your own home requires, i rent the movie the money pit- laugh and feel much better.