Using a Homeownership Calculator

Make an informed real estate move with this mortgage calculator.

Today I’ll discuss the value of homeownership and introduce to you the PLACE Mortgage Calculator app, which is a tool that can help you assess whether now is the right time to buy or continue renting. You can download it or you can reach out to me so I can give you the link. At 0:47 in the video above, I will be showing you my phone’s screen so you can follow along as I try to use it.

As you jump into the app, there is an option at the bottom that lets you calculate the value of homeownership. Click on that so you can start with the process. You can customize the data to your situation, but as an example, I’ll change the purchase price to $1 million with a down payment of 20%, and set the interest rate to a conservative 6% and the average appreciation to 2%. I’ll also change the tax filing status to married with an income that’s more typical to couples in our area.

“The PLACE Mortgage Calculator app can help you assess if now is the right time to buy or continue renting.”

The calculator shows that in year one, the appreciation on the property will be $20,000 with the principal reduction almost at $10,000. This tells us that this is $10,000 extra equity that we built up. It also shows you the tax savings. For professional tax advice, please always talk to your tax advisor about this topic. In the example we laid out, the tax savings is a little over $15,000. If you look at it all combined, there’s around $45,000 of benefits from owning the property.

It’s important to consider your current situation and determine if it makes sense for you, but this can shed new light on the cost of homeownership. Keep in mind that this is compounded year after year, which can add up significantly over time. On the other hand, if you’re currently renting, your rent will likely increase each year, meaning you’re essentially paying off your landlord’s mortgage rather than building equity in your own home.

I’m always happy to work through specific examples for you and talk to you about what’s going on in our changing market. Call or email me so we can check to see if now is the right time for you to buy a home. I look forward to connecting soon.