Eldon Hudspeth estimates that the cost of taxes, insurance, and maintenance on a home he bought is $4,980 a year. His other yearly costs would be $12,760 in
mortgage loan interest and $2,050 in estimated depreciation. For a year, he would
lose $1,030 interest on his down payment and save $2,400 on his income taxes.
Eldon could have rented a similar home for $1,400 a month and had annual
expenses of $302 for insurance and $2,760 for utilities. The security deposit on
the rented home would have been $500. For the first year, which would have been
less expensive, buying or renting a home? How much less?