How to use the real estate calculator
- Enter the home price.
- Enter your down payment and the closing costs to buy, both as a percentage of the price.
- Enter the mortgage rate and choose the loan term.
- Enter how many years you keep the home before selling.
- Enter property tax as a yearly percentage of the home's value, your insurance per year and any HOA fees per month.
- Enter maintenance as a yearly percentage of the value, the expected home value growth and the selling costs (agent commission, transfer taxes and fees).
- Read the cash you'd have after a sale, the equity chart and the breakdown of where your money went.
How the numbers are calculated
The mortgage follows standard amortization, so the loan balance comes from the same schedule a lender uses. Property tax and maintenance are taken as a share of the home's value at the start of each year, so they rise as it appreciates. Insurance and HOA fees stay at today's amounts.
The gain on the money you put in treats the home as an investment: your down payment, closing costs and every dollar of principal go in, and the net proceeds come out. The yearly return is the internal rate of return on those monthly cash flows. Interest, tax, insurance and upkeep are the running cost of living there. The net gain after all costs subtracts them as well, and it is usually negative: owning costs money, just as renting does.
Worked example
The defaults are a $400,000 home with 20% down and 3% closing costs, a 6.5% 30-year mortgage, 1.1% property tax, $1,500 insurance, 1% maintenance, 3% yearly growth, 6% selling costs, and a sale after 10 years:
- Down payment $80,000, closing costs $12,000, loan $320,000 at $2,022.62 a month
- After 120 payments, the loan balance is $271,283.60, so you've repaid $48,716.40 of principal and $193,997.73 of interest
- Home value: 400,000 × 1.03^10 = $537,566.55, and equity is $266,282.95
- Selling costs: 6% × 537,566.55 = $32,253.99
- Net proceeds: 537,566.55 − 32,253.99 − 271,283.60 = $234,029
- Money put in: 80,000 + 12,000 + 48,716.40 = $140,716.40, so the gain is $93,312.56, about 6.29% a year
- Running costs: $193,997.73 interest + $50,441.07 tax + $15,000 insurance + $45,855.52 maintenance = $305,294.31
- Total paid: $446,010.71, so after all costs you are $211,981.75 behind, about $1,767 a month
That last figure is the true monthly cost of living in the home for those 10 years. Compare it with the rent for a similar place; the rent vs. buy calculator does exactly that, including what your down payment could have earned.
What moves the result most
| Change from the defaults | Net proceeds | Gain on money put in |
|---|---|---|
| None (sell after 10 years) | $234,029 | $93,313 |
| Sell after 5 years | $136,332 | $23,887 |
| No growth in value | $104,716 | −$36,000 |
| 15-year loan | $362,845 | $93,313 |
Time matters most. Buying and selling cost 9% of the price here, and that takes years of growth to recover. With no growth at all, you lose exactly those transaction costs: $12,000 to buy plus $24,000 to sell. A 15-year loan puts more cash into the home each month, so the proceeds are larger, but the gain on that money is the same because it comes from the value growth.
Limits of this calculator
It ignores income tax: the mortgage interest deduction, the capital gains exclusion on a main home, and any tax on the sale. It also ignores inflation and big one-off costs like a new roof. Home prices can fall as well as rise, so try a growth of 0% or less as a stress test. For a property you plan to rent out, use the rental property calculator instead.
Frequently asked questions
Is buying a home a good investment?
It can be, mostly through forced saving and leverage: you control a $400,000 asset with $80,000 down, so 3% growth on the whole value is a much bigger return on your cash. The catch is the running costs and transaction costs, which mean short stays often lose money.
What is the difference between equity and net proceeds?
Equity is the home's value minus what you owe. Net proceeds are what you actually receive when you sell, after agent commission and other selling costs are taken out. In the example, equity is $266,283 but a sale nets $234,029.
How much do home values grow each year?
It varies widely by place and period. Long-run national averages in the U.S. have been a few percent a year, close to inflation plus a little, but individual markets can be flat or fall for years. Test a few growth rates rather than relying on one.
Why include maintenance?
Homes wear out. A common budgeting rule is 1% to 2% of the value a year for repairs and replacements. Leaving it out makes owning look cheaper than it is.
Related calculators
- Rent vs Buy Calculator — Compare the true cost of renting and buying over the years you plan to stay, including opportunity cost.
- Mortgage Calculator — Your full monthly housing cost, including property tax, insurance, PMI and HOA fees.
- Rental Property Calculator — Cash flow, NOI, cap rate, cash-on-cash return and the 1% rule for a rental property you're thinking of buying.
- Home Affordability Calculator — How much house your income supports under the 28/36 rule, with your debts and down payment.
Results are estimates for educational purposes and are not financial, tax or legal advice. See our disclaimer.