Case Study 1

Is owning a home a net gain or loss over time?

Pamatin have to decide whether to buy a house or rent for the next 10 years.
For deciding whether to buy or to rent, we will need to compare the net value
of the following plans in 10 years.
Plan A
30 years, 5.25% interest/year
Price of the house
15,321,240.00
Down payment 10%
i = .4375% /month
T&I = 23,214.00/month
Upfront Fees: 139,284.00
Po = 1,857,120.00
Value of house after 10 years
16,853,364.00
i on the saved money = .
5%/month

Plan B
15 years, 5% interest/year
Price of the house
15,321,240.00
Down payment 10%
i = .4166667% /month
T&I = 23,214.00/month
Upfront Fees: 139,284.00
Po = 1,857,120.00
Value of house after 10 years
16,853,364.00
i on the saved money = .
5%/month
RENT

Rent: 125,355.60/month
Po = 1,857,120.00/month
i = .5%/month
allowance 132,319.80/month
Money left from the allowance 132,319.80 - 125,355.60= 6,964.20