Should I buy or rent?
It is the big question for anyone who lives, or wants to live, in Vallarta. The answer depends on the price of the property, what you would pay in rent for a similar one, how long you plan to stay and what your money would do if you didn't use it to buy. This calculator compares two lives: someone who buys with a mortgage and someone who rents and invests the money they didn't use to buy. At the end it tells you how much net worth each would have. It is an illustration based on the assumptions you choose.
Comparison result
Fill in the data and press “Compare buying and renting” to see the result.
- With these assumptions
- Your net worth at the end if you buy
- Your net worth at the end if you rent
- The year buying starts to pay off
- What you pay when buying, with down payment and closing costs
- Mortgage payment
- What you pay each month if you buy, in the first year
- What you pay each month if you rent, in the first year
- Estimated value of the property at the end
- What you would still owe on the mortgage at the end
Net worth is what you would have: the home minus what you owe, plus your savings. The buyer's net worth is the property's value, minus what is still owed on the mortgage, plus what they invested, with its returns, in the months when renting would have cost more. The renter's is what they invested from the start, down payment and closing costs included, plus the difference in each month when buying would have cost more, also with its returns.
How the math works
It compares two people who spend the same. The buyer pays the down payment and closing costs up front; the renter invests that same amount. Then, every month, the buyer pays the mortgage and the cost of owning, and the renter pays the rent. The rent and the cost of owning rise every year by the increase you chose; the mortgage payment stays the same. Whoever spends less that month invests the difference, at the annual return you entered.
At the end it compares what each one has: the buyer has the property at its final value, minus what is still owed, plus their savings; the renter has their investments. The result changes a lot with appreciation, return and how long you stay; try several values.
An illustration, not financial advice
This calculator uses the assumptions you choose. The result is an illustration to organize your thinking; it is not financial or investment advice, and it does not predict the future.
It does not include income tax on investments, the taxes and costs of selling the property at the end, or changes in the mortgage rate; the return is taken before taxes. Nor does it measure the peace of mind of owning your home or the freedom to move when you rent. Before deciding, review your numbers with a financial advisor and with us.
Want to compare with real properties?
Blanca Torres, our credit and closing manager, helps you run this comparison with real prices, rents and mortgages in the area you like, free of charge and with no obligation.