Numbers plugged into nytimes rent vs. buy calculator
All numbers in 2008 dollars. I examined whether home buying was actually better than renting over the past 7 years.
Home Price: 650K
How Long Will You Stay: 7 years (actually turned out to be 7 years, 2 months)
Mortgage Details: 3.29% (This is the average rate we paid over 7 years. We started at 4.25 but ended at 2.65 — refinanced twice as rates fell over the duration…)
Down Payment: 20%
Mortgage Length: 30 Year (Technically we got a 10/1 ARM, then refinanced with a 7/1 on the first refi, and 5/1 on the second refi. Still, the respective amortization schedule(s) reflects a 30 year term)
4.0 Home Price Growth Rate (650K at 4% compounded over 7 years = 855K. We sold for 851K.)
2.5% Rent Growth Rate (a tad higher than inflation)
7.1% Investment Return Rate (This is the inflation adjusted, dividends-reinvested return of money invested in the U.S. S&P 500 in early 2008 and taken out in early 2015)
1.35% Taxes
20% Marginal Tax Rate
1.5% Closing Costs on Purchase (about 10K)
5.2% Cost to Sell (about 46K)
1.07% yearly renovation — about 7K/yr
.15% home owner fees — about $900/yr
350 monthly utilities — heating, yard maint, yearly town dump fees, misc
2K in “additional renting costs”
Living a FI 