Rent VS. Buy Mortgage Calculator

There are a lot of Mortgage calculators already out there, but the problem is they don’t necessarily take into consideration all the details that affect the Rent vs. Buy decision. Most of them are overly simplified, or worse – they’re US based and make assumptions on tax write-offs that aren’t available to the Canadian buyer.

With that in mind Joycer has a created a more detailed mortgage calculator that lets you try out a number of situations and variables to factor into your rent vs. buy decision, particularly here in Vancouver. We’ve put the calculator on it’s own page, with all the details.

Go to http://VancouverCondo.info/rentvsbuy to check it out.

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5 Vancouver BC

#80 between 79 and 81 is always right!

Anonymous

@scullboy: "That world city Wikipedia entry was interesting. It seems pretty accurate. I’d say that Toronto is a third tier city, having lived there for years. Montreal and Vancouver also seem to be about eighth tier cities. They’re nice and have their own flavour, but world class? Hardly, especially if you’ve travelled. It certainly put the whole “everyone wants to live here” thing in perspective, doesn’t it? I mean at the end of the day, what’s Vancouver got that Helsinki doesn’t?" Wikipedia says "This roster generally denotes cities in which there are offices of certain multinational corporations providing financial and consulting services rather than denoting other cultural, political, and economic centres.", so it's basically a ranking that uses only one metric. It's nothing to do with whether or not people want to live in those places, or whether they're even… Read more »

Dave

@Anonymous:

Sure, but nobody really knows. All I am suggesting is that risk should be matched on both sides of the evaluation.

Anonymous

@Dave: The TSX may be a better place to put your downpayment that into real estate in Vancouver right now.

Dave

@patriotz:

Your investment return should match a realistic risk-return for the period in question. If you are planning to buy a house within 4 years, I am not sure the TSX is the best investment for your plans. Why would you put your downpayment at that much risk? On a 4 year scale, bonds are probably the best to use. On a 10 year scale, maybe the TSX.

Dave

@anonymous:

You are misreading what the author means by 'lead'. Yes, the bond market moves in advance of the BOC. This doesn't mean that the bond market dictates the overnight rate. It means that the market moves quickly and is good at predicting the actions of the bank.

patriotz

@Dave:

– I think the return on investment of 6% is too high. Not many people have gotten that in the last 10 years.

Well someone who simply bought the TSX index would have done better. TSX total return over the 10 years ending Nov 30 was 6.3%. And that's tax advantaged as it consists of dividends and capital gains.

Oh I forgot, we're not supposed to compare RE to the stock market because stocks are risky and RE isn't. We can only compare RE to GIC's. 🙁

Former Halgonian

Dude,

You are preaching to the converted on this blog with your "backwater comments."

But you constant "any other place is better than Vancouver because I got cheap lobster and saw Stevie Wonder" is getting to be pretty pathetic.

Just be happy that you moved. We will let you know when the market turns – in maybe a one year or two. By that time, you might be ready to come back.

scullboy

Greetings from San Francisco again! That world city Wikipedia entry was interesting. It seems pretty accurate. I'd say that Toronto is a third tier city, having lived there for years. Montreal and Vancouver also seem to be about eighth tier cities. They're nice and have their own flavour, but world class? Hardly, especially if you've travelled. It certainly put the whole "everyone wants to live here" thing in perspective, doesn't it? I mean at the end of the day, what's Vancouver got that Helsinki doesn't? 🙂 It's been an amazing day. Bill Clinton was late for the Dreamforce keynote address, so Stevie Wonder came out and had a chat with the Salesforce CEO. His talk was really moving. I don't mind telling you I got a little teary. And Clinton! Except for maybe Nelson Mandela and Desmond Tutu, I really… Read more »

VHB

@Anonymous: Rents, my friend, rents. rent vs own price. That's what it is about.

rent/income will reflect local amenities, income, land shortage, etc.

No one ever claimed that rent/income is some universal constant. It isn't. It is rent/price that must make sense compared to the yield on other assets.

N

@Anonymous:

The thing is, they really don't have much land there. That apartment would be considered a handsome spread for a couple with one child.

Anonymous

@Devore:

"You’re always supposed to compare a world class city like Vancouver to other world class cities like Tokyo."

It was Best Place on Meth who initiated the comparison. I found a 1 bedroom apartment in Tokyo, roughly the size of a Yaletown shoebox, for almost $550K. Average wages in Tokyo aren't too dissimilar to here (look it up). So what's the explanation?

anonymous

Dave,

you're right about maintaining tight spreads, but it's the BoC that's forced to follow. The bond market leads the BoC, not the other way around. The chart in the following link is a good example.
http://www.canadianmortgagetrends.com/canadian_mo

Dave

@jesse:

Easy fix to that. Quantitative Easing.

N

@patriotz: I would guess about $1200, maybe $1500.

jesse

@Dave: "Yes, but the spread can only get so big."

Before what… people figure out that it's silly to loan money at higher interest rates? Sounds to me like the snake is slowly starting to digest the deflationary rabbit and rates have a long trek ahead to return to the historical average.

Drachen

@Dave:

"IF you believe real estate is driven by affordability as I do, and IF you believe rates are going to be flat for 2011, THEN, it’s probably a steady as she goes year."

So, in other words the whole history of economic theory, value, return on investment, all those things, none of them are as important as your economic genius. You have a what in economics exactly? PhD? MA? BA? What's that? You took a couple of classes once? And you're the world's greatest authority now?

Hubris, thy name is Dave.

Dave

@jesse:

Yes, but the spread can only get so big. The five year rate should level off when the bond market sees flat overnight rates. The overnight rate will be at 1.00 for most or all of 2011.

IF you believe real estate is driven by affordability as I do, and IF you believe rates are going to be flat for 2011, THEN, it's probably a steady as she goes year.

Interesting to see that VHB now admits that the market will be flat, barring a "surprise". Capitulation?

CRASH JPMorgan-Chase

You are so close to the real heart of the scandal. Bernanke wasn't just accepting junk collateral for the bailout money, Bernanke was buying back the fraudulent mortgage-backed securities Wall Street has been selling for years. This is why even the pretense of profitability has been abandoned. The FED already knows these equities are worthless. As detailed in "Bankers Gone Wild", mortgages were cranked out by unscrupulous mortgage brokers, then bundled together into mortgage securities, which were in turn re-sold to investors as triple-A investments, even though the bundles included sub-prime mortgages already defaulting as US jobs were shipped overseas. These mortgage-backed securities are a Wall Street invention! And at first they appeared to be immensely profitable, so not only were US financial corporations, investment houses, and pension funds buying them, but so too were non financial corporations and major… Read more »

Dave

@CashedOut:

What, you think the overnight rate is going up in the next six months? It's not. Trust me on this.

The Ant

@Dave: I didn't mean it was too complicated for you personally Mr. Grumpy. I meant it was too complicated for the hypothetical person that you seemed concerned would leave default values as is and be misled in some fundamental way.

jesse

@Dave: "The Bank of Canada isn’t moving interest rates for a minimum of six months."

Still need to qualify at the 5 year rate and 5 year rates are "moving."

CashedOut

@Dave: Thanks Dave. That's -1 for you.

Dave

@The Ant:

Yes, it's probably too complicated for me. Thanks for the feedback Captain O.

Dave

@VHB:

The Bank of Canada isn't moving interest rates for a minimum of six months. Trust me on this.