Mortgage or Rent?

Application Mortgage or Rent? is sophisticated decision making tool, answering the question, whether is financially better to take mortgage and buy own real estate, or to live in rented real estate without taking mortgage. By filling in of several input parameters you get transparent answer to the question, what is financially better: Mortgage or Rent?

Input screen consists of three parts:

1. General information,
2. Information related to mortgage and to living in own residence,
3. Information related to living in rented residence.

General information are related mostly to macroeconomic parameters, which are necessary for calculation. In particular:
- Type of real estate - villa, house or flat,
- Currency,
- Count of years - time period, during which is planned to live in rented residence or pay back the mortgage,
- Interest rate in economy - average amount of interest rate for example on bank deposits,
- Inflation,
- Volume of own savings - money saved up,
- Real estate price trend.

Second part consists of information related to mortgage and living in own residence, particularly:
- Mortgage amount,
- Mortgage interest rate, possibly monthly mortgage payment,
- Monthly accommodation charges,
- Monthly household insurance,
- Monthly payment protection insurance, investment/non-investment.

Third part consists information related to living in rented residence: amount of monthly rent payment.

After pressing Calculate button, application compares two scenarios based on financial inputs: living in own residence and living in rented residence over whole time period.

Result screen is split to two columns:
1. Living in own real estate,
2. Living in rented real estate.

In upper part of screen is final statement: which alternative is financially better.

To compare both scenarios plausible, following assumptions are taken into account:
1. Total costs by living in own real estate as well as in rented real estate are equal.
2. Money available at the beginning are in case of living in own residence invested to the real estate purchase. Money available at the beginning are in case of living in rented residence deposited to the bank as term deposit.
3. Money spent to mortgage pay back in case of living in own real estate, are in case of living in rented real estate deposited to the bank as savings.
4. All other costs related to living in own residence, are in case of living in rented residence invested to bank as saving.

Calculation expresses future value of money. Calculation can/needn´t consider inflation.