Rent Vs Buy Questions

[Wannabe Mustache]

I'm about to sign for refinancing my house with a 5 year locked in rate of 2.99%.  I'm in Canada so the maximum time we can lock an interest rate in is 5 years.  The amortization period is 25 years.  2.99% is great but who knows where interest rates will be when I have to renew in 5 years.   

Looking at the amortization schedule and the amount of interest paid to the bank I've been wondering if it's worth it.  At the end of 5 years I will have paid $19,188.98 in interest and will still owe $116,793.  The total mortgage will be for $140,900.00.

I figured out the monthly housing costs for housing without any maintenance but of course there are always maintenance costs. 

Mortgage                   $667
Electricity                  $110
Natural Gas                 $90
Water Heater Rental    $21
Insurance                   $93
*edited to
add
Property Taxes           $190

                                 $1171

The house is about 1100 sq feet and has two bedrooms and a fantastic yard.  I have 2 kids to the yard is relevant. 

I could rent for about the same costs.  But, the equity, about $40,000 could be invested. 

I don't want to retire here and I will inherit properties from my parents.  One is a property (shared with my aunt so I would share it with my cousins) on a lake and would be a perfect retirement home in the summer and honestly, I would love to spend winters somewhere south and inexpensive (so not Florida), at least until grandchildren are on the scene (that's thinking wayyyyy into the future).   

I don't know how to do the math.  Should I just estimate an interest rate based on investing the 40,000 into ETFs? 

I could also rent the house out for about $1300 and rent a place where I could walk to work - now I drive about 10 minutes and no I can't/won't bike in -20 C weather with two kids in tow.

That interest really, really irks me. 

Thanks for your help. 

[RetiredAt63]

Totally not what  you asked, but where are you getting 2.99% for a 5 year term?  My mortgage is coming up for renewal beginning of September, and I would love to lock in a rate like that.  Eventually my almost-ex husband and I will get the matrimonial home sold (finally filing for divorcee has finally got him moving on that), and then my share of that money will go to pay the LOC and mortgage on this house, but that isn't necessarily going to happen before September.

Sort of on topic, you and your DH were having major money issues.  You were thinking of seeing a lawyer to figure out where you stood and what your options were.  Rent versus buy, and how the money from the house would remain in your name only and not joint, if possible, is also something you should discuss with your lawyer.  If it is joint, try to get it split and 1/2 into each of your names, then he can blow his half without hurting your half. For me the matrimonial home has been an albatross around my neck, I truly wish we had been renting when we split.  It doesn't sound as if you will need or want this house long term.

Good luck.

[ak907]

Try playing with my spreadsheet:
http://forum.mrmoneymustache.com/share-your-badassity/rent-or-buy-a-house-spreadsheet/msg243353/#msg243353

Run the numbers and tell us if you think its worthwhile.
NYTimes has a calculator a lot of readers like that you could try as well.