Renting?
Consider buying.
Renters typically spend the same amount on rent that homeowners spend on a mortgage. Once you own a home, you’ll begin to receive tax benefits – and the savings can be extraordinary.
The following chart displays a cost comparison for a renter and homeowner over a seven-year period. For this example, the renter is paying $800 per month. The homeowner purchased a home for $110,000 with a monthly mortgage payment of $1,000 for a 30-year fixed product.
Year |
Rent Payment |
Mortgage Payment |
Monthly Difference |
After-Tax Savings |
Annual Difference |
After-Tax Savings |
1 |
800 |
1000 |
-200 |
-50 |
-2400 |
-600 |
2 |
840 |
1000 |
-160 |
-10 |
-1920 |
-120 |
3 |
882 |
1000 |
-118 |
+32 |
-1416 |
+384 |
4 |
926 |
1000 |
-74 |
+76 |
-888 |
+912 |
5 |
972 |
1000 |
-28 |
+122 |
-336 |
+1464 |
6 |
1021 |
1000 |
+21 |
+171 |
+252 |
+2052 |
7 |
1072 |
1000 |
+72 |
+222 |
+864 |
+2664 |
8-30 |
|
|
* |
* |
* |
* |
*Savings increases every year
With the tax benefits of owning a home, the homeowner is paying less than the renter in Year 3. As of Year 6, the homeowner pays less than the renter on a dollar-to-dollar basis. For larger mortgages, the tax benefits and savings increase with an increased mortgage and property value.
PERL offers a wide variety of programs and products for first time homebuyers. From clients requiring 103% financing for down payment assistance – to those with challenging credit scores – PERL does it all.