Home Price Comparison

Savings
Current housing (monthly)
New home

Comparison

Enter the purchase price.

An estimate. Enter your area's home insurance and property tax rates; left blank, they are taken as 0.49 % and 0.90 % of the purchase price a year, the US averages: insurance from Freddie Mac (2023, $4.90 per $1,000 of home value) and property tax from the Census Bureau's 2024 American Community Survey. Both vary widely by state: Florida is about 0.76 % and 0.75 %, Massachusetts about 0.35 % and 1.00 %. The example mortgage rate, 7.03 %, is Freddie Mac's 30-year fixed average for the week of 24 September 2026; enter the rate you are quoted. The example savings rate, 3.63 %, is the benchmark (federal funds) rate the FDIC lists for savings deposits in September 2026, which high-yield accounts track; the national average savings rate is 0.37 %. Enter what your savings actually earn.

Home Cost Comparison & Opportunity Cost Calculator – Methodology

Overview

This calculator evaluates the true monthly and annual financial impact of purchasing a new home compared to your current housing costs. Unlike basic affordability tools, this calculator incorporates:

  • Monthly housing expenses (mortgage, taxes, insurance, HOA, parking)

  • Current housing expenses (rent/mortgage, insurance, parking)

  • Opportunity cost of savings used for a down payment

  • Changes in investment interest income

  • Cash-purchase vs. mortgage scenarios

  • Fully amortized loan payments based on rate and term

The result is a clear, quantified comparison showing whether the new home will save money or cost more, including the financial impact of lost interest on savings.

1. Current Interest Income From Savings

If you have savings sitting in an interest-bearing account (money market, CD, or high-yield savings), this tool calculates how much income you currently earn each month.

Formula

Current Monthly Interest=(Savings × Annual Interest Rate) / 12

This value represents opportunity cost—income you lose if savings are used as a down payment on the new home.

2. Current Monthly Housing Expenses

Your existing housing expenses are added together to establish a baseline for comparison.

Components

  • Rent or current mortgage

  • HOA (if applicable)

  • Insurance

  • Parking

Formula

Current Housing Expenses=Rent/Mtg + Insurance + HOA + Parking

3. New Home Monthly Housing Expenses

When evaluating a new home purchase, the calculator determines ongoing monthly costs based on mortgage financing or cash purchase.

3.1 Mortgage Calculation

If a mortgage is used, the tool computes the fully amortized monthly payment:

Loan Amount

Mortgage Amount = Purchase Price + Closing Costs − Savings (not less than 0)

Closing costs are paid from savings first; if savings don't cover the price and the closing costs, the shortfall is borrowed.

Monthly payment, amortized monthly as mortgages are:

M = P × r (1 + r)^n / ((1 + r)^n − 1)

Where:

  • P = mortgage amount
  • r = annual mortgage rate ÷ 12
  • n = number of years × 12

For example, $400,000 at 7.03 % over 30 years is $2,669.27 a month. The example rate in the form, 7.03 %, is Freddie Mac's Primary Mortgage Market Survey average for a 30-year fixed-rate mortgage in the week of 24 September 2026 (6.42 % for a 15-year).

New home insurance and property taxes are percentages of the purchase price a year, which you can enter for your area. They default to the US averages: 0.49 % for insurance (Freddie Mac, 2023: $4.90 a year per $1,000 of home value) and 0.90 % for property tax (US Census Bureau, American Community Survey 2024: $3,211 median real estate taxes on a $360,600 median home value). Both vary widely by state; in Florida insurance is about 0.76 % and property tax 0.75 %, in Massachusetts about 0.35 % and 1.00 %.

3.2 New Housing Expenses

New Housing Expenses=M+Insurance+Taxes+HOA+Parking

If the purchase is a cash purchase, mortgage values default to $0.

4. New Interest Income (Remaining Savings)

After the purchase, any remaining savings continue earning interest. The calculator shows this reduced interest income:

Remaining Savings = Savings − Purchase Price − Closing Costs (not less than 0)

New Monthly Interest=Remaining Savings × Interest Rate / 12

5. Housing Expense Change

This shows whether the new home’s ongoing expenses are more or less than your current housing costs.

Housing Change=New Expenses−Current Expenses

  • Negative value = monthly savings

  • Positive value = monthly cost increase

6. Lost Interest Income (Opportunity Cost)

When savings are used toward a home purchase, the interest they previously earned disappears.

Lost Interest Income=Current Interest−New Interest

This is a crucial part of evaluating the total cost of a home purchase.

7. Total Net Monthly & Annual Impact

The calculator combines the change in housing costs with the change in interest income to determine the true financial impact.

Net Monthly Impact

Net Monthly Impact = Housing Change + Lost Interest Income

Net Annual Impact

Net Annual Impact=Net Monthly Impact×12

This final number tells you whether the new home will save money or cost more, accounting for both cash flow and opportunity cost.

Example (Sample Calculation)

If:

  • New housing expenses are $332 less per month, but

  • Lost interest income is $4,455 more per month,

Then:

Net Monthly Impact=−$332.43 + $4,455 = $4,122.57

The new home costs approximately:

  • $4,122.57 more per month

  • $49,470.84 more per year

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