Home Price Compare
The comparison is between two monthly numbers. Current housing expenses are the four amounts you enter added up; the new home's are the mortgage payment, insurance at 0.575% of the purchase price a year, taxes at 0.95% a year, and the last two lines you name yourself. The difference between them is the housing expenses change.
Savings are treated as a down payment, so the interest they were earning is part of the cost. Interest income change is the net interest the remaining savings earn, after tax, less the net interest the whole balance earned before. Adding that to the housing expenses change gives the net monthly impact, which is what the verdict line reads.
Enter the four rates as percentages: 6.5 means 6.5%. The interest rate is echoed back as the fraction it becomes, so 6.5% reads 0.0650; the previous version printed it as a percentage there.
Savings above the purchase price mean no mortgage, and the mortgage lines say so rather than showing zero. Savings below it are treated as a down payment and the rest is borrowed; closing costs come out of the savings left over but are not added to the amount borrowed.
The payment is a fully amortised annual payment at the annual rate over the number of years entered, divided by twelve, which is how the published workbook computes it. A monthly-compounded amortisation of the same loan is roughly 1% lower; this port keeps the published figure rather than silently repricing every mortgage on the page.
Home Cost Comparison & Opportunity Cost Calculator – Methodology
Overview
This calculator evaluates the true monthly and annual financial impact of purchasing a new home compared to your current housing costs. Unlike basic affordability tools, this calculator incorporates:
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Monthly housing expenses (mortgage, taxes, insurance, HOA, parking)
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Current housing expenses (rent/mortgage, insurance, parking)
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Opportunity cost of savings used for a down payment
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Changes in investment interest income
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Cash-purchase vs. mortgage scenarios
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Fully amortized loan payments based on rate and term
The result is a clear, quantified comparison showing whether the new home will save money or cost more, including the financial impact of lost interest on savings.
1. Current Interest Income From Savings
If you have savings sitting in an interest-bearing account (money market, CD, or high-yield savings), this tool calculates how much income you currently earn each month.
Formula
Current Monthly Interest=(Savings × Annual Interest Rate) / 12
This value represents opportunity cost—income you lose if savings are used as a down payment on the new home.
2. Current Monthly Housing Expenses
Your existing housing expenses are added together to establish a baseline for comparison.
Components
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Rent or current mortgage
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HOA (if applicable)
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Insurance
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Parking
Formula
Current Housing Expenses=Rent/Mtg + Insurance + HOA + Parking
3. New Home Monthly Housing Expenses
When evaluating a new home purchase, the calculator determines ongoing monthly costs based on mortgage financing or cash purchase.
3.1 Mortgage Calculation
If a mortgage is used, the tool computes the fully amortized monthly payment:
Loan Amount
Mortgage Amount=Purchase Price−Down Payment (Savings Applied)
Monthly Payment Formula (Amortized Loan):
M = P × [r (1 + r)^n ] / [(1 + r) ^n − 1]
Where:
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P = loan principal
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r = monthly interest rate (annual rate ÷ 12)
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n = number of monthly payments
3.2 New Housing Expenses
New Housing Expenses=M+Insurance+Taxes+HOA+Parking
If the purchase is a cash purchase, mortgage values default to $0.
4. New Interest Income (Remaining Savings)
After the down payment, any remaining savings continue earning interest. The calculator shows this reduced interest income:
New Monthly Interest=Remaining Savings × Interest Rate / 12
5. Housing Expense Change
This shows whether the new home’s ongoing expenses are more or less than your current housing costs.
Housing Change=New Expenses−Current Expenses
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Negative value = monthly savings
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Positive value = monthly cost increase
6. Lost Interest Income (Opportunity Cost)
When savings are used toward a home purchase, the interest they previously earned disappears.
Lost Interest Income=Current Interest−New Interest
This is a crucial part of evaluating the total cost of a home purchase.
7. Total Net Monthly & Annual Impact
The calculator combines the change in housing costs with the change in interest income to determine the true financial impact.
Net Monthly Impact
Net Monthly Impact = Housing Change + Lost Interest Income
Net Annual Impact
Net Annual Impact=Net Monthly Impact×12
This final number tells you whether the new home will save money or cost more, accounting for both cash flow and opportunity cost.
Example (Sample Calculation)
If:
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New housing expenses are $332 less per month, but
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Lost interest income is $4,455 more per month,
Then:
Net Monthly Impact=−$332.43 + $4,455 = $4,122.57
The new home costs approximately:
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$4,122.57 more per month
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$49,470.84 more per year
THIS CALCULATOR IS BEST USED ON A PC