Purpose

These tools help clients make informed decisions about major purchases by testing ongoing affordability, comparing down-payment and financing scenarios, analyzing the trade-off between paying down debt and investing, and evaluating potential refinances. They are designed for use in planning conversations — not as standalone advice.

How the Math Works

All calculations use standard time-value-of-money formulas equivalent to Excel's PMT, CUMIPMT, CUMPRINC, and NPER functions. No external APIs or third-party models are used.

Home Purchase Affordability

• Available Savings = Gross Income − Taxes − Living Expenses − Other Savings Goals.
• 28% Housing-Cost Test: Total housing costs (P&I + property taxes + insurance + maintenance) are capped at 28% of gross household income. The threshold is adjustable.
• Down-Payment Scenarios: Four scenarios (20%, 15%, 10%, 5%) compute the mortgage payment, total interest, and delta vs. the 20% baseline using standard amortization.
• Savings Plan Solver: Uses an annuity-due formula (PMT with type = 1) to solve for the monthly savings needed to fund the selected down payment, accounting for returns on savings.

Down Payment vs. Investing

• Compounds extra cash at the assumed after-tax investment return.
• Subtracts the cumulative mortgage interest that cash would have eliminated (via CUMIPMT over the same period).
• Net Advantage = Investment Gain − Interest Saved by paying down the loan.
• Break-even year: The first year in which net advantage turns positive. Uses a forward-scan method (year-by-year), not interpolation — the actual crossover may occur mid-year.

Refinance Analyzer

• New Loan Amount = Remaining Balance + Closing Costs − Cash to Close + Equity Pulled.
• LTV Check: New Loan vs. Property Value × Max LTV%. Flags if over limit.
• Months Remaining on the current loan is solved via NPER given the current balance and P&I payment.
• Recoup Period = (Closing Costs + Points Cost) / Monthly Savings. If monthly savings ≤ 0, recoup = "Never."
• Points Analysis: Compares lifetime interest with vs. without the bought-down rate to determine whether paying points generates a positive return over the loan life.
• Each scenario is evaluated independently against the "Months You Plan to Stay" input.

Buy vs. Lease (Vehicle)

• Buy path: Standard auto-loan amortization (PMT), plus a depreciation curve applied to the purchase price to estimate resale value at each year.
• Lease path: Monthly lease payment × term, plus disposition fees. Lease cycling assumes a new lease at the same terms; disposition fee is charged only on completed lease terms.
• Break-even: Forward-scan — first year where the cumulative cost of buying falls below cumulative leasing. May occur mid-year.
• Maintenance: Tiered annual costs (warranty period vs. post-warranty) applied to each ownership year.

Finance vs. Cash (Vehicle)

• Same structure as Down Payment vs. Investing but applied to auto loans.
• Compounds the cash lump sum at the assumed after-tax return, then subtracts cumulative auto-loan interest paid through each year.
• Interest accumulation is capped at the loan term — once the loan is paid off, no further interest accrues, but the investment continues compounding.

Assumptions & Limitations

• Constant returns: Investment returns are assumed constant over the analysis period. Real-world returns exhibit volatility and sequence-of-returns risk that can materially change outcomes.
• No mortgage interest deduction: The tools do not model the federal mortgage interest deduction or any state-level housing tax benefits. For clients who itemize, the effective cost of the mortgage may be lower than shown.
• No PMI: Private mortgage insurance is not modeled for sub-20% down-payment scenarios. Clients choosing less than 20% down should add estimated PMI to the housing cost components.
• User-supplied inputs: Property taxes, homeowners insurance, flood insurance, maintenance reserves, and escrow amounts are entered by the user — not estimated by the tool. Accuracy depends on the quality of these inputs.
• Immediate close: Refinance scenarios assume the loan closes immediately at the entered rate. Rate-lock timing, float-down provisions, and market movement are not modeled.
• No opportunity cost of down payment: The Home Affordability calculator does not separately model the opportunity cost of tying up cash in a down payment. That analysis is handled by the Down Payment vs. Investing tab.
• Vehicle depreciation is simplified: Buy vs. Lease uses a fixed annual depreciation curve. Actual resale value depends on make, model, mileage, condition, and market conditions.
• No inflation adjustment: All dollar amounts are nominal. Maintenance costs, insurance premiums, and property taxes are assumed constant unless the user manually adjusts them.
• Tax treatment is simplified: After-tax investment returns are a single blended rate. Capital gains treatment, tax-loss harvesting, and asset location are not modeled.

Default Values

Each calculator loads with illustrative default values to demonstrate functionality. These defaults do not reflect current market conditions and should be replaced with the client's actual figures before drawing any conclusions.

In particular: mortgage rates, auto loan rates, and expected investment returns should be confirmed with current lender quotes and the client's investment policy statement.

Important Disclosures

• These tools are provided for planning and illustrative purposes only.
• Concert Financial Planning, LLC does not guarantee any specific outcome, rate, or return.
• Results should be reviewed in the context of the client's complete financial plan, risk tolerance, and personal circumstances.
• The tools do not constitute an offer, solicitation, or recommendation to buy, sell, or refinance any financial product.
• Past performance of any investment or strategy does not guarantee future results.
• Clients should consult with their tax advisor, lender, and insurance provider before making financial decisions based on these illustrations.