Methodology

Principal and interest use the standard fixed-rate amortization formula. Property tax, insurance, HOA and PMI are added from the values you enter. Closing costs are a planning percentage, and extra principal is applied after the scheduled payment.

Taxes, insurance and PMI can change in real life, so they are not treated as fixed lifetime costs.

The calculator compares a housing-only debt-to-income limit with a total-debt limit and uses the tighter monthly housing budget. It then solves backward for a home price using the mortgage rate, term, down payment, tax, insurance, HOA and PMI assumptions.

The DTI limits are editable planning inputs, not a statement of any lender's underwriting policy.

The renter starts with the cash a buyer would use for the down payment and buying costs. Each month, whichever option has the lower modeled housing cost invests the difference. Buying wealth includes home equity after modeled selling costs; renting wealth is the modeled investment portfolio.

Appreciation, rent growth and investment returns are scenarios, not forecasts. Small changes can materially change the result.

The refinance comparison evaluates payment cash flows, remaining loan balances and refinance costs over the time horizon you choose. Break-even is the first modeled month when the refinance reaches a non-negative net benefit.

Long-run comparison includes refinance costs whether paid upfront or financed into the new loan.

• Individual credit underwriting or lender approval.
• Exact lender fees, points, prepaid items or escrow requirements unless explicitly entered.
• Tax advice, tax deductions or personal tax consequences.
• Future interest rates, property values, rents or investment returns as predictions.