Author Topic: How Best to Calculate How New Home Purchase Will Delay Retirement?  (Read 1809 times)

oldtoyota

  • Magnum Stache
  • ******
  • Posts: 3179
Hey all!

Sometimes, I think about moving to another home. The neighborhood I'd like to move to has homes that are more expensive than the one I have. What I'd like to do before I buy is figure out how much longer I'd have to work to pay for the additional expense. Once I have this info, I can make a more informed decision.

Here's what I am thinking (using fake numbers).

Current Home: $200K
Potential Home: $300K

We would sell the current home and have more than enough to pay 20% down on the new home. Credit is good so expect good loan rate.

I am thinking I would need to use the current mortgage percentage rate, take the down payment into account, and calculate the new overall long-term cost of the new loan as well as how that would affect me on a monthly basis.

Am I missing anything?


ak907

  • 5 O'Clock Shadow
  • *
  • Posts: 82

lauren_knows

  • Pencil Stache
  • ****
  • Posts: 846
  • Age: 42
  • Location: Annandale, VA, USA
  • Happiness is a choice
    • The Crowdsourced FIRE simulator
Re: How Best to Calculate How New Home Purchase Will Delay Retirement?
« Reply #2 on: May 29, 2014, 10:10:55 AM »
Unless you plan on selling your residence and moving to a cheaper area after retirement hits, all you need to do is figure this as a different "expense" by your standard mortgage calculator, and calculate your time to retirement how you do now.

I'm actually doing the same thing, as we're looking to move from a townhouse to a single-family house next year.  It basically means saving $700 less per month, BUT we plan on moving to a cheaper area at some point after that.  I conservatively only consider the sale of that future home to be a net of the difference between the purchase prices ($100k) and add that to my portfolio at retirement.  In reality, the value should increase over time.

oldtoyota

  • Magnum Stache
  • ******
  • Posts: 3179
Re: How Best to Calculate How New Home Purchase Will Delay Retirement?
« Reply #3 on: May 29, 2014, 11:02:28 AM »
Unless you plan on selling your residence and moving to a cheaper area after retirement hits, all you need to do is figure this as a different "expense" by your standard mortgage calculator, and calculate your time to retirement how you do now

Thanks to you both!

I will check out the spreadsheet.

The above is what I was thinking the answer would be, and I wanted to make sure before taking the plunge. Much appreciated!