Friday, January 15, 2021


Since the COVID19 pandemic hit the world and lockdowns were implemented, people's lifestyle has drastically changed and it affected some of their major decisions in life such as home buying and renting. Most people thought that living in the rural might be the best decision while there is an ongoing pandemic, but that is not always the case like what Bloomberg had featured regarding the real estate moves during COVID19 of people from the US, UK, and Australia.

There are still a lot of factors to consider before buying or renting a space for you or for your family. Some of those are the nature of your work and work location, your personal needs and the needs of your family especially the kids and elderlies, the amount you can afford, the amount you can save, and a lot more factors that are important for the day-to-day living and survival amidst this extraordinary period.

For sure, we are like those people featured in Bloomberg who are still in the process of choosing whether to buy or rent. To help you decide which makes more sense or which might work for you in the long run, you might be needing a Rent or Buy Calculator. This site features two calculators which enable people to quickly decide if it is likely to make more sense to rent or to purchase a home.

The Basic Rent or Buy Calculator

This basic calculator shows how much home you can afford to buy while paying a monthly payment equivalent to your current rental payment. You can use this tool if you know you will live in the home for an extended period of time and have no intent to sell it anytime soon and just want to see what will match your current rental spending.

Using the basic calculator, you can estimate the loan size you could pay for based on your current monthly rental payment. The app automatically subtracts the cost of property taxes and homeowners insurance from the rent amount to come up with the equivalent loan size. 


Let’s take someone living in Chicago as an example. According to 2019 data, the median rent for a one-bedroom apartment in Chicago is $1100. You have to put that value in the space provided in Mortgage Details’ Monthly Rent Payment. 30 years and 4 % APR is standard, so basically you don’t have to change these values as it will not have a huge effect on the result, same with the PMI.

Your affordable loan amount depends on the monthly rent payment, so if you have a high monthly rent payment your loan amount also increases. The ownership expenses, on the other hand determines how much is the affordable loan amount, so the higher your ownership expenses, such as the annual property taxes, annual home insurance and monthly HOA fees, the lower you loan amount would be.

The price of your home is dependent on your down payment, the price increases as your down payment also increases. It is advised that you pay at least 20% equity to avoid 
paying for PMI on top of the regular monthly home payment.

At the bottom part, you’ll see the current mortgage rates. 
It is very helpful when looking for a lender, because different lender offers different rates at different locations. Credit score is also very important as most of the lenders prefer a CC of above 700.

The Advanced Rent or Buy Calculator

This tool offers more features that can be used to compare the longer term impact of inflation, real estate appreciation & real estate transaction costs when determining which option better suits a person’s needs. You can also use this tool if you think you are likely to sell the home in a few years.

This advanced calculator might be a bit complicated and you might be needing professional or people with proper experience to explain things better and clearer, but it is still very helpful to get the ideas and broader scenarios in buying or renting.

Both calculators come in handy, especially nowadays that we still cannot go out for extended period to see brokers, agents or experts to help us decide. This is a free tool which gives us a lot of information that we need as a buyer, so don’t forget to check it out.


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