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Buying a House vs Renting at Fifth Avenue
 
   House
(5% Down)
1,500 sq. ft.
Bi-level
3 Bedrooms
(1 up/2 down)
Fifth Avenue Townhome
1,500 sq. ft.
3 Bedrooms
$1,500/month
plus utilities
 House
(10% Down)
1,500 sq. ft.
Bi-level
3 Bedrooms
(1 up/2 down)
Fifth Avenue Townhome
1,500 sq. ft.
3 Bedrooms
$1,500/month
plus utilities
         
Purchase Price     200,000.00                     -       200,000.00                     -  
Down Payment       10,000.00                     -         20,000.00                     -  
Legal Fees and Closing Costs1         3,725.00                     -           3,725.00                     -  
Mortgage Default Insurance (CMHC)         5,225.00                     -           3,600.00                     -  
Invested by Renter @ 3.99% (5 yr. GIC)         13,725.00         23,725.00
Mortgage @ 6.85%     195,225.00                     -       183,600.00                     -  
         
Mortgage Payment2         1,349.36                     -           1,269.01                     -  
Rent                      -           1,500.00                      -           1,500.00
Property Tax3             307.52                     -               307.52                     -  
Water Heater Rental Charges               25.00

 n/a 

              25.00

 n/a 

Invested by Renter each month @ 2.5%                       -              181.88                      -              101.53
Total Monthly Payments4         1,681.88         1,681.88         1,601.53         1,601.53
         
Total Payments after 5 years5     114,638.04    114,638.04     119,817.04    119,817.04
         
House sold for 105% of purchase price     210,000.00                     -       210,000.00                     -  
Less 6% commission and legal fees       14,100.00                     -         14,100.00                     -  
Less Mortgage Owing

177,394.68

                    -  

166,831.41

                    -  
Cash        18,505.32       28,304.97       29,068.59       35,401.60
         
House sold for 110% of purchase price     220,000.00                     -       220,000.00                     -  
Less 6% commission and legal fees       14,700.00                     -         14,700.00                     -  
Less Mortgage Owing     177,394.68                     -       166,831.41                     -  
Cash        27,905.32       28,304.97       38,468.59       35,401.60
         
1. Closing costs include appraisal fees, land transfer tax and title insurance but do not include GST on a brand new house.
2. Does not include any premium for life insurance on mortgage.
3. Assumes assessment equal to purchase price, a tax rate (municipal + education) of 1.845144% (Thunder Bay 2006) and NO increase in taxes during the first five years.
4. Does not include property insurance or utility costs which would be significantly higher for the house than the townhome.
5. Does not include purchase and/or maintenance of appliances, or any maintenance or repair costs for the dwelling.

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Last modified: 10/11/15