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Information and interactive calculators are made available to you as self-help tools for your independent use and are not intended to provide investment advice. We cannot and do not guarantee their applicability or accuracy in regards to your individual circumstances. All examples are hypothetical and are for illustrative purposes. We encourage you to seek personalized advice from qualified professionals regarding all personal finance issues.
Purchase price of the home you wish to buy.
Cash you have for the down payment and closing costs.
The current interest rate you expect to receive on your mortgage.
The number of years over which you will repay this loan.
Your property tax rate. 1% for a $100,000 home equals $1,000 per year in property taxes.
Your homeowner's insurance rate. 0.5% for a $100,000 home equals $500 per year for homeowner's insurance.
The percentage the lending institution charges for its origination fee. 1% for a $100,000 home equals $1,000.
The total number of points paid to reduce the interest rate of your mortgage. Each point costs 1% of your mortgage balance.
Estimate of all other closing costs for this loan. This should include filing fees, appraiser fees and any other miscellaneous fees paid.
Any association fees you are required to pay per month with the ownership of this home. Also include any other maintenance costs you expect to incur with the ownership of this home that you are not paying while you continue to rent.
Total funds remaining for down payment.
Total amount of loan.
Amount you currently pay for rent per month.
The rate of return, after taxes, you could receive if you invested your closing costs and down payment instead of purchasing a home.
The actual rate of return is largely dependent on the type of investments you select. For example, from December 1999 to December 2009, the average annual compounded rate of return for the S&P 500 was -0.6%, including reinvestment of dividends. From January 1970 to December 2009, the average annual compounded rate of return for the S&P 500, including reinvestment of dividends, was approximately 10.1% (source: www.standardandpoors.com). Since 1970, the highest 12-month return was 61% (June 1982 through June 1983). The lowest 12-month return was -43% (March 2008 to March 2009). Savings accounts at a bank may pay as little as 1% or less but carry significantly lower risk of loss of principal balances.
It is important to remember that these scenarios are hypothetical and that future rates of return can't be predicted with certainty and that investments that pay higher rates of return are generally subject to higher risk and volatility. The actual rate of return on investments can vary widely over time, especially for long-term investments. This includes the potential loss of principal on your investment. It is not possible to invest directly in an index and the compounded rate of return noted above does not reflect sales charges and other fees that funds and/or investment companies may charge.
Your current marginal income tax rate.
What you expect for the average long-term inflation rate. A common measure of inflation in the U.S. is the Consumer Price Index (CPI), which has a long-term average of 3.1% annually, from 1925 through 2009. The CPI for 2009 was -1.0%, as reported by the Minneapolis Federal Reserve. Inflation rate is used to adjust amounts subject to annual increases. These amounts include rent, insurance and tax payments.
Annual appreciation you expect in the home you are purchasing.
The percent of your home's selling price you expect to pay to a broker or real estate agent when you sell your home.
Total of principal, interest, taxes and insurance (PITI) paid per month for your home. Insurance includes Principal Mortgage Insurance (PMI) and homeowner's insurance.
The value of the tax deduction you receive on your mortgage's interest and home's property taxes. For example, if you have $900 in interest and $100 property taxes per month, the value of the tax deduction would be $250. (At a tax rate of 25%).
Total of principal paid per month on your mortgage.
Your initial house payment minus the value of the tax deduction and principal payment.
Net selling price of your home after subtracting any sales commissions.
Monthly principal and interest payment.
Monthly cost of Private Mortgage Insurance (PMI). For loans secured with less than 20% down, PMI is estimated at 0.5% of your loan balance each year.
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