Using the calculator at realestate.yahoo.com/calculators/rent_vs_own.html, use the following data to compute "Should I Rent or Buy a Home?" Your rent is $650 per month, you pay your own electric bill which averages $100 per month, your renter's insurance premium is $125 per year, and rent payments have increased at an annual rate of 3%. You can buy a home for $85,000 in an area that has shown an annual appreciation of 3%. You have enough cash to make a down payment of $20,000, which will allow you to get an interest rate of 5.5% for 30 years. Your annual home owner's insurance premium will be $750 and your property taxes will be $1,500 per year.

You estimate annual maintenance costs on the home at $350 per year. You will base your comparison on 30 years assuming your marginal tax bracket is 25%, your opportunity cost is 8%, and the anticipated annual inflation rate is 3%. Will you be better off buying or renting and by how much?