Lately you have been considering buying a home and have found one that meets your needs for a Home price of $$175,000$ located in a good neighborhood. It will require a minimum $10\%$ down payment and a mortgage loan at $5\mathrm{.}5\%$ interest on a $30$ year term. The tax rate for this home is assumed to be $1\mathrm{.}5\%$ input this into the mortgage calculator. You have saved enough to put $20\%$ down which will eliminate the need for private mortgage insurance $($PMI$).$ The calculated payment fits within the amount of home your lender has pre$-$qualified you for. Since you are in the $20\%$ marginal income tax bracket and itemize your expenses, you could benefit from the interest rate and property tax deduction. You are planning on staying in the home for $8$ years. Homes in this market have appreciated at the rate of $2\mathrm{.}5\%$ per year provided they are maintained. You know that if you continue to invest your savings in the same balanced mutual fund index that you have been using your investment rate of return has been about $3\mathrm{.}75\%.$ Inflation has been around $1\mathrm{.}5\%$ the last few years, so it seem like there is equity growth above the inflation rate in this area. It will be necessary to pay some closing costs if you purchase the home above. You calculate that those expenses will be about $3\%$ and at the end of the $8$ year holding period when you sell you will also pay selling costs of around $6\mathrm{.}75\%.$ From the day you purchase the home until the day you sell you will have expenses for maintenance$/$renovation of $1\mathrm{.}25\%.$ Additionally you will have on going expense for homeowners insurance $\mathrm{.}50\%$ and Utilities $$350$ per month. There is a great Home Owners Association in this neighborhood that has HOA fees of $$120$ per month. If the mortgage rate was $8\mathrm{.}5\%$ and all other terms and conditions remain the same what is the monthly payment or rent amount?