Five years have passed and Jamie Lee, 34, is considering taking the plunge--not only is she engaged to be married, but she is also deciding on whether to purchase a new home.

Jamie Lees cupcake caf is a success! It has been open for over a year now and has earned itself rave reviews in the local press and from its regular customers who just cannot get enough of her delicious varieties of cupcakes. One such customer, who stopped by on a whim in the cafs first week of business, is Ross. After a whirlwind courtship, Ross, a self-employed web designer, proposed, and Jamie Lee agreed to be his wife.

The bungalow that Jamie Lee has been renting for the past five years is too small for the soon-to-be newlyweds, so Jamie Lee and Ross have found a brand new three-bedroom, 2 bath home in a quiet neighborhood for $289,000.

Their neighborhoods homeowners association dues would be $684.00 a year. After paying a years worth of house payments, their equity will be $5,200. Based on Jamie Lee and Ross income, they fall into a 20% tax rate bracket. Use this payment information along with the information below to compare the costs of renting and buying a house.

Rent payment for a house (monthly)	$650
Renter's security deposit	$300
Renter's insurance (yearly)	$75
Savings account interest rate	1.04%
Mortgage payment	$1,417.00
National average property tax rate	1.19%
Homeowner's insurance payment (monthly)	$57
Maintenance and repair (% of home value)	1%
Interest lost on down payment/closing costs	$700
Mortgage interest paid in first year	$12,300
Estimated annual appreciation	$3,500

Rental CostsMonthly rentnot attemptedAnnual rental payments (monthly rent 12)not attemptedRenter's insurancenot attemptedInterest lost on security deposit (deposit savings account interest rate)not attemptedTotal annual cost of renting$0.00Buying CostsAnnual mortgage paymentsnot attemptedProperty taxes (annual costs)not attemptedHomeowner's insurance (annual premium)not attemptedEstimated maintenance and repairsnot attemptedAfter-tax interest lost because of down payment/closing costsnot attemptedLess: Financial benefits of homeownershipGrowth in equitynot attemptedTax savings for mortgage interest (annual mortgage interest tax rate)not attemptedTax savings for property taxes (annual property taxes tax rate)not attemptedEstimated annual appreciationnot attemptedTotal annual cost of buying$0.00