Trust artifact
Methodology
Every figure our calculators use is either cited, labeled a rule of thumb, or flagged as excluded. This page lists all three, so you can check our work instead of trusting it.
Sourced figures
Freddie Mac Primary Mortgage Market Survey (PMMS)
Default mortgage rate in all three calculators
Weekly national average commitment rate for 30-year fixed-rate mortgages. Default at build time: 7.03% (week of September 24, 2026). The PMMS is the most widely cited mortgage-rate benchmark in the U.S.
FHFA House Price Index (HPI)
Default home-appreciation assumption in rent vs. buy
Federal Housing Finance Agency index tracking house-price changes from repeated mortgage transactions. Long-run 30-year average annual appreciation is roughly 3.8%. We present it as a historical average, never as a forecast — future appreciation is unknowable.
Amortization mathematics
Every payment, balance, and interest figure
Standard fixed-rate amortization: payment = L·r / (1 − (1+r)^−n) with monthly compounding; balances from the closed-form remaining-balance formula. No approximations, no lookup tables. Round only at display.
Labeled rules of thumb
These vary too much by location and circumstance to have one honest national number. We pick a defensible default and say it's a rule of thumb — override them in every calculator.
| Assumption | Default | Caveat |
|---|---|---|
| Property tax | 1.1% of home value/yr | Rough national average effective property-tax rate (~1.1% of home value). Local rates vary widely — override with your county's rate. |
| Homeowners insurance | 0.6% of home value/yr | Typical homeowners-insurance cost (~0.6% of home value). Varies a lot by state and risk. |
| Maintenance | 1% of home value/yr | Common planning rule of ~1% of home value per year for upkeep and repairs. |
| Rent growth | 3%/yr | Rents historically grow roughly with inflation (~3%/yr). Future rent growth is unknowable. |
| PMI | 0.6% of loan/yr | Flat mid-range default within the 0.5%–1.5%/yr conventional PMI band (CFPB-cited industry range; can run ~0.3% for strong credit and above 2% for weak); actual quotes vary by credit score and LTV. |
The tax model, simplified on purpose
The rent-vs-buy calculator credits a mortgage-interest deduction only when itemized deductions (interest + property tax, with SALT capped at $40,400 for 2026 — half that, $20,200, for married-filing-separately) exceed the standard deduction, multiplied by your marginal rate. The filing-status figures are the 2026 amounts from IRS Revenue Procedure 2025-32: $32,200 married filing jointly (the calculator's default), $16,100 single or married filing separately, and $24,150 head of household. Most households no longer itemize, so this models the benefit conservatively. Simplified tax model: mortgage interest + property tax (SALT capped at $40,400 for 2026; high incomes above ~$505K MAGI face a phase-down toward $10,000, not modeled here) must exceed the $32,200 standard deduction (2026 married-filing-jointly) before any benefit is credited. Most households at these defaults do not itemize. Planning estimate, not tax advice.
The DTI conventions
Lenders commonly size housing to 28% of gross income and total debt to 36% (the “28/36 rule”) — the traditional conservative benchmark. Since 2021 the federal Qualified-Mortgage rule no longer caps DTI at a fixed 43%: the General QM test is price-based (APR vs. APOR). DTI remains a core underwriting consideration, and 43% is shown as the historical QM benchmark and a realistic “stretch” reference.
In the affordability calculator, 28/36% are the defaults and both are adjustable. The 43% historical Qualified-Mortgage benchmark is shown as a separate, honest comparison — since 2021 the federal General QM test is price-based rather than a fixed 43% DTI cap, but the benchmark remains the conventional reference for what a lender might stretch to.
What the models deliberately exclude
- Closing costs at purchase and sale (typically 2–5% of price combined) — they cut against buying, so excluding them makes buying look better, and we say so.
- The investment return on the down payment if it were invested instead — this cuts the other way, against renting. Neither side of the ledger is hidden.
- Moving costs and the rent-vs-buy implications of lifestyle flexibility.
- PMI in the affordability calculator — it depends on credit profile; we add it in the mortgage-payment calculator where you can see and adjust the assumption.
Update policy
Rate defaults are checked against the PMMS weekly survey and updated when the default materially drifts. When we update a default, the change is visible in the calculator's source note. Figures last verified: September 2026.
Found an error? contact@settleoak.com — corrections get the same visibility as the original figure.
This site provides estimates for planning, not tax, legal, or investment advice. See also the privacy policy.