This statement always raises an eyebrow…or 10, when I say in this market, with just a moderate down payment, you can buy a home for less than what you pay in rent.
This is how it comes out by the numbers:
Let’s take a $175,000 house in this market, assuming a 5% down payment.
| Principal and Interest | @4.25 | 817.88 |
| Taxes | @1.25% | 182.29 |
| Insurance | 100.00 | |
| Mortgage Insurance | 81.74 | |
| Total | $1,181.88 |
Lets compare that to a reasonable rent payment in this market of $1,250. This is how we come to prove the statement that you can buy a home for less than your rent.
Even further, after the tax benefits of mortgage interest, and the doors which this immensely valuable deduction opens, the net effect means an amazing savings to the home buyer over renting.