Cost of Homeownership Calculator

Formula

To calculate the Cost of Homeownership ($COH$):

\[ COH = MP \times n + M + I + T + R \]

Where:

$COH$ is the total cost of homeownership ($)
$MP$ is the monthly mortgage payment ($)
$n$ is the total number of monthly payments
$M$ is the total maintenance costs over the loan term ($)
$I$ is the total insurance costs over the loan term ($)
$T$ is the total property tax over the loan term ($)
$R$ is the total cost of renovations or improvements over the loan term ($)

What is the Cost of Homeownership?

The cost of homeownership refers to the various expenses associated with owning a home beyond the initial purchase price. These costs include mortgage payments, property taxes, home insurance, maintenance and repair costs, and potentially homeowners association fees. These costs can vary greatly depending on the location, size, and condition of the home. The cost of homeownership also includes the opportunity cost of the money invested in the home, which could have been invested elsewhere for potentially higher returns.

Example Calculation 1

Let's assume the following values:

Monthly Mortgage Payment ($MP$) = $1,500
Total Number of Monthly Payments ($n$) = 360
Total Maintenance Costs ($M$) = $20,000
Total Insurance Costs ($I$) = $10,000
Total Property Tax ($T$) = $15,000
Total Cost of Renovations ($R$) = $5,000

Using the formula:

\[ COH = 1500 \times 360 + 20000 + 10000 + 15000 + 5000 = 540000 + 20000 + 10000 + 15000 + 5000 = 590000 \]

The Total Cost of Homeownership is $590,000.

Example Calculation 2

Let's assume the following values:

Monthly Mortgage Payment ($MP$) = $2,000
Total Number of Monthly Payments ($n$) = 240
Total Maintenance Costs ($M$) = $25,000
Total Insurance Costs ($I$) = $12,000
Total Property Tax ($T$) = $18,000
Total Cost of Renovations ($R$) = $8,000

Using the formula:

\[ COH = 2000 \times 240 + 25000 + 12000 + 18000 + 8000 = 480000 + 25000 + 12000 + 18000 + 8000 = 543000 \]

The Total Cost of Homeownership is $543,000.