Now more than ever has this question been quite as relevant: Are you better off buying your home or renting the place where you live?

It certainly isn’t a new question, and in fact a question that has been asked, evaluated and answered ad nauseam in the real estate and financial planning worlds. For millions of people in the US (and around the world for that matter), it very well may have been a much better decision to be a renter over the past four years if you bought at the height of the market. As the housing market recovers (and there are clear signs of a recovery depending on the specific locations you look at), this very well may be the time to become a home owner. Buoyed by stabilizing home prices and historic low interest rates, the Housing Affordability Index (HOI) is approaching a record all-time high of nearly 73%.

To do the evaluation on whether to continue to rent or to buy is not too difficult with regard to the mathematics. But there are a couple dozen facts and speculations you need to apply in order to project what is the better financial decision. Obviously interest rates, home prices and mortgage program terms are part of that assessment. Then there are things such as your marginal income tax bracket, what appreciation rate you expect on real estate, and what return you would otherwise get on the money you invest in the property.

Here is a great tool that is sophisticated enough to account for all of these variables yet not too complex that most people can input the information and quickly see the tradeoffs of owning versus renting.

New York Times Buy-Rent Calculator

There’s much more to assess about your overall financial situation when considering the purchase of a home. But this is a great first step to see if owning your home will have you be better off financially now and through your retirement.

Jeff Smith has been helping families in the Marin community for more than 17 years. As a trusted financial advisor and mortgage advisor, Jeff helps his clients make better financial decisions to improve the outcomes of the financial choices in life.