Should you rent or buy a home and what are the long-term costs? On the one hand, you're tired of your landlord. On the other hand, buying a home likely means borrowing a lot of money. As well, when buying a home you must make a down payment, money that could otherwise be invested or put into savings. What should you do?

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	Your Information (Modify the values presented below according to your needs) Funds available for real estate and/or investment: $ Disposable monthly income available for housing or investing: $ Estimate of the long-term inflation rate: % Estimate of after-tax return on portfolio investments: % Input related to the purchased residence: Annual equivalent (APR) mortgage rate: % Down payment: $ Months until maturity, amortization period (max 360): months Monthly expenses for purchased residence: $ Expected (after-tax)return on real estate: % Market value of the purchased residence: $ Input related to the rented residence: Monthly rent: $ Monthly expenses associated with the rental: $
	Your Result Total Wealth, Real Dollars If savings are all reinvested Years Buy House Rent House Difference 5 $ $ $ 10 $ $ $ 15 $ $ $ 30 $ $ $ If savings are not reinvested Years Buy House Rent House Difference 5 $ $ $ 10 $ $ $ 15 $ $ $ 30 $ $ $

Important notice: This calculator assumes that if you rent, you will invest all the money you would have used as a down payment. In addition, the calculator assumes that the money saved from renting relative to owning a home would also be invested. Many (perhaps even most) people may be tempted to spend rather than invest the savings. For those with less than iron self discipline, buying a home could constitute a form of forced savings.

* We wish to thank York University Professor Moshe A. Milevsky, and researchers at the Individual Finance and Insurance Decisions (IFID)Centre, a non-profit corporation, housed at the Fields Institute in Toronto, for developing the content of this calculator.