Many people in Sequim and Port Angeles are still renting when they could buy.
In many cases, the amount of money a renter spends on rent can be about the same as or less than the amount a homeowner spends on a mortgage. With the tax benefit for homeowners, the savings can be significant.
Buy vs. Rent Comparison
The chart below shows a cost comparison for a renter and a homeowner over a seven year period.
- The renter starts out paying $800 per month with annual increases of 5%
- The homeowner purchases a home for $110,000 and pays a monthly mortgage of $1,000
- After 6 years, the homeowner’s payment is lower than the renter’s monthly payment
- With the tax savings of homeownership, the homeowner’s payment is less than the rental payment after 3 years
|
Years
|
Rent Payment
|
Mortgage Payment
|
Monthly Difference
|
After Tax Savings
|
Yearly Difference
|
After Tax Savings
|
| 1 | 800 | 1000 | -200 | -50 | -2400 | -600 |
| 2 | 840 | 1000 | -160 | -10 | -1920 | -120 |
| 3 | 882 | 1000 | -118 | +32 | -1416 | +384 |
| 4 | 926 | 1000 | -74 | +76 | -888 | +912 |
| 5 | 972 | 1000 | -28 | +122 | -336 | +1464 |
| 6 | 1021 | 1000 | +21 | +171 | +252 | +2052 |
| 7 | 1072 | 1000 | +72 | +222 | +864 | +2664 |
| 8-30 | Savings increase every year | |||||
Last Updated on March 31, 2010 by Chuck Marunde
