Loans & Mortgages
Net cost to own
Everything spent on owning, less the cash recovered at sale.
The Formula
Net = down + payments + tax + maintenance + insurance - sale proceeds
Everything spent on owning, less the cash recovered at sale.
| Symbol | Meaning | Unit | Notes |
|---|---|---|---|
| D | Down payment | currency | Cash paid at purchase. |
| M | Payments | currency | Total mortgage payments made. |
| S | Sale proceeds | currency | Sale price less selling costs and remaining loan. |
What Each Symbol Means
Dcurrency
Down payment
Cash paid at purchase.
Mcurrency
Payments
Total mortgage payments made.
Scurrency
Sale proceeds
Sale price less selling costs and remaining loan.
See It Worked With Real Numbers
A formula on its own does not tell you which number goes where. The how to calculate rent vs buy page applies this equation to a concrete case, shows every intermediate step, and names the mistakes that produce a wrong answer even when the algebra is right.
Where This Formula Appears
This equation is the working core of How To Calculate Rent Vs Buy, filed under Finance. Every number the guide produces comes from substituting into this one line.