HomeOwnership
May 21, 2017 at 4:44:48 PM
Click and drag the blue numbers to change them.
1 
Houseprice =  $
$
2 
Downpayment =   % of houseprice
$
3 
Homeloan =  houseprice - downpayment
$
4 
interestrate  =    % //interest rate on the loan
%
5 
loanyears=
6 
totalPriceofHouse = homeloan × (1 + interestrate/12)^(loanyears ×12) + downpayment //includes the cost of "renting the money" from the bank: what you're really paying for that house (simplified... should improve this math)
$
7 
priceofloan = totalPriceofHouse - houseprice
$
8 
taxes  =    % × houseprice × loanyears //no idea what the tax rate really is.
$
9 
rebates =    × loanyears //approx... need to actually calculate what you can deduct from your taxes
$
10 
maintenance =    % × (houseprice) × loanyears //this is for HOA fees, plummers, homeowner's insurance, maintenance, fixing those broken pipes. Probably low
$
11 
CostofOwnership = taxes +  maintenance - rebates //loan on house, taxes and misc costs. .
$
12 
totalcostofownership = CostofOwnership + totalPriceofHouse //True, true cost of home
$
13 
homevalueincrease =   % //how much will the home increase in value each year.
%
14 
valueofhouse = houseprice × (1 + homevalueincrease)^loanyears //value of house at the end of the loan (sales price?). You made money! (?)
$
15 
monthlypayment = (totalCostofOwnership - downpayment ) / loanyears / 12 //monthly payments including the maintenance costs (not just loan). Higher than rent?
$
16
%
17 
investmentfuturevalue = downpayment × (1 + sp500annualgrowth/12)^(loanyears ×12) + (monthlypayment) × (12/sp500annualgrowth) ((1 + sp500annualgrowth/12)^(loanyears × 12) - 1)  //what happens if I take the downpayment and monthly and put it into the S&P500?
$
18 
rent = $   //ok, that isn't fair. Lets take out a rent payment from that investment.
$
19 
investmentfuturevaluesansrent = downpayment × (1 + sp500annualgrowth/12)^(loanyears ×12) + (monthlypayment-rent) × (12/sp500annualgrowth) ((1 + sp500annualgrowth/12)^(loanyears × 12) - 1) //how much my s&p500 account would be worth at the end of the term
$
20 
stockstakehome = investmentfuturevaluesansrent - investmentfuturevaluesansrent × 20% //capital gains tax of 20%, assuming you aren't putting this money into a retirement account or something.
$
21 
housetakehome = valueofhouse - CostofOwnership - priceofloan
$
22 
difference = housetakehome - stockstakehome
$
23
24 
//Does not take into account inflation. This ought to hit homes and stocks equally.