Help homebuyers do the math

Low interest rates could be tempting your clients into buying a vacation home, or to help one of their kids to go from renting to owning.

But there are so many factors to consider before buying a home. How should a client weigh a low mortgage against property taxes, maintenance fees, relator commissions, and their own long-term goals?

Read: Should clients rent or buy?

The New York Times has put together a detailed interactive calculator that crunches the numbers on whether it’s better to buy a home or to keep renting. It takes two dozen factors—from purchase price and length of mortgage to the opportunity cost of making a purchase instead of investing in the market—and boils them down to a single number and a chart.

For instance, someone thinking of purchasing a home that costs $500,000 with a 20% down payment and a 2% mortgage is likely better off buying than renting, the calculator indicates.

Try the calculator here.

Also read:

Which TV characters can actually afford their homes?

Housing in Toronto, Calgary still hot

More young clients will buy homes

Staff

The staff of Advisor.ca have been covering news for financial advisors since 1998.