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 $279,000.

Their neighborhoods homeowners association dues would be $444.00 a year. After paying a years worth of house payments, their equity will be $3,250. Based on Jamie Lee and Ross income, they fall into a 30% 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)	$500
Renter's security deposit	$150
Renter's insurance (yearly)	$90
Savings account interest rate	1.06%
Mortgage payment	$1,313.38
National average property tax rate	1.15%
Homeowner's insurance payment (monthly)	$37
Maintenance and repair (% of home value)	1%
Interest lost on down payment/closing costs	$600
Mortgage interest paid in first year	$12,900
Estimated annual appreciation	$2,500

Rental Costs
Monthly rent	$500.00
Annual rental payments (monthly rent x 12)		$6,000.00
Renter's insurance
Interest lost on security deposit (deposit x after-tax savings account interest rate)		$600.00
Total annual cost of renting		$6,600.00
Buying Costs
Annual mortgage payments		$15,758.16
Property taxes (annual costs)
Homeowner's insurance (annual premium)
Estimated maintenance and repairs
After-tax interest lost because of down payment/closing costs
Less: Financial benefits of homeownership
Growth in equity	-
Tax savings for mortgage interest (annual mortgage interest x tax rate)	-
Tax savings for property taxes (annual property taxes x tax rate)	-
Estimated annual appreciation	-