How this instrument works
This sheet answers a narrower question than it sounds like it does: for one specific month, does owning the home you are looking at cost more or less cash than the rental you are comparing it against? It takes a mortgage principal-and-interest figure you already have — from a lender quote or a separate amortisation run — and adds the recurring costs a landlord already folds into your rent quote: property tax, homeowners insurance, and upkeep. Renters compare a single number quietly, buyers usually compare the mortgage payment alone, and the gap between those two habits is exactly where this sheet earns its keep.
The maintenance line is entered as a percentage of home value rather than a flat dollar figure on purpose, because upkeep scales with the size and age of the structure, not with the loan on it — a $600,000 house needs a roof and a furnace eventually regardless of how it was financed. Lenders and home inspectors commonly cite a range of roughly 1% to 4% of value per year depending on the home's age and condition, so the field lets that estimate flex per listing instead of hiding inside a single hard-coded number.
What the total deliberately excludes matters as much as what it includes. It ignores the equity each mortgage payment builds, any change in the home's price, closing costs on the purchase, the mortgage-interest tax deduction, and the opportunity cost of parking a down payment in the home instead of somewhere else. Those are real dollars, but they play out over years, not inside one month's cash flow, and folding a rough multi-year guess into a precise monthly figure would make the whole number less trustworthy, not more.
- Enter Monthly rent, $ for the specific unit or listing you are weighing against buying.
- Enter Mortgage principal & interest, $/mo — the P&I figure from a lender quote or amortisation sheet, not the full advertised payment.
- Add Annual property tax, $ and Annual homeowners insurance, $ from the listing, a county assessor site, or an insurance quote.
- Set Annual maintenance, % of home value against the Home value, $ field to estimate yearly upkeep.
- Read Total monthly cost of owning, $ and Owning minus renting, $/mo — a positive number means owning costs more than renting that month; a negative one means owning costs less.
Worked example — $2,000 rent against a $400,000 home
A renter paying $2,000 a month is pricing out a $400,000 house instead. The lender quotes an $1,800 monthly principal-and-interest payment; the listing shows $3,600 a year in property tax and $1,200 a year in homeowners insurance; maintenance is estimated at 1% of the home's value annually. Property tax and insurance each add $300 and $100 a month, and 1% of $400,000 spread across twelve months adds $333.33, so Total monthly cost of owning, $ comes to 1,800 + 300 + 100 + 333.33 = $2,533.33.
Set against the $2,000 rent, Owning minus renting, $/mo reads 2,533.33 − 2,000 = $533.33: owning this specific home costs about $533 more in cash each month than renting the comparison unit. That gap says nothing about the equity building inside the $1,800 payment or what the home might be worth in five years — it is a same-month cash comparison, and the longer-horizon questions around price appreciation and built equity sit deliberately outside it.
Questions
What does this comparison leave out that matters over several years?
Equity built inside each mortgage payment, any change in the home's price, closing costs on the purchase, the mortgage-interest tax deduction, and the opportunity cost of the down payment sitting in the house instead of invested elsewhere. All of those are real money, but they unfold over years rather than one month, so this sheet leaves them for a separate, longer-horizon comparison.
Why is maintenance a percentage of home value instead of a dollar figure?
Upkeep scales with the size, age and condition of the structure rather than with how it was financed, so lenders and inspectors commonly quote it as roughly 1% to 4% of value per year. Entering it as a percentage lets the estimate move with the specific home's value instead of relying on one fixed dollar guess that fits no listing exactly.
Should I enter the full advertised mortgage payment or just P&I?
Enter principal and interest only — the Mortgage principal & interest, $/mo field. Some lender quotes bundle tax, insurance and even mortgage insurance into one escrow-inclusive number already; feeding that combined figure in here and then adding tax and insurance again double-counts those costs and overstates the true monthly total.
Does this sheet include HOA dues or private mortgage insurance?
No, not as separate fields. Add homeowners association dues into Annual homeowners insurance, $ or fold private mortgage insurance into the mortgage payment figure if your quote already carries it, so the total still reflects everything actually leaving your account each month.
Owning looks cheaper here — does that mean I should buy?
It means owning costs less cash in a typical month under the figures you entered, nothing more. Closing costs, a shorter time horizon than a mortgage's term, or an uncertain job situation can all make renting the better call even when this monthly comparison favors owning. The sheet compares monthly cash flow; it does not weigh the rest of the decision.
How is this different from a mortgage calculator?
A mortgage calculator derives the principal-and-interest payment from a loan amount, rate and term. This sheet takes that payment as a given input and adds the other recurring ownership costs — tax, insurance, maintenance — so the total can be set directly against a rent figure, which a bare mortgage payment alone cannot honestly be.
References
- Consumer Financial Protection Bureau — Owning a home
- U.S. Dept. of Housing and Urban Development — Buying a home
Read this first: This instrument shows arithmetic, not advice. Real offers add fees, taxes and terms that vary by lender and place — verify the figures against your actual paperwork before deciding anything.