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# Be smart assessing the long term cost difference between new homes you like that are in different neighbourhoods by using our new calculator

Property
Be smart assessing the long term cost difference between new homes you like that are in different neighbourhoods by using our new calculator

Location, location, location is the real estate mantra.

But the final choice between properties you see as equally desirable might come down to where they are.

When buying a property, or deciding between multiple properties, it is important to take into account the location of the properties in relation to your primary destinations, such as work, family and recreation.

While a property closer to a major city may be more expensive on paper you may find that when travel costs are taken into account it may be a lower cost option.

We have a new calculator* that can help resolve the cost side of this problem.

It's a calculator that will help quantify the additional costs (or savings) you will have depending on the extra distances between properties.

Obviously you need to know the distances between the alternatives. And you need to know the average cost of fuel per kilometre (km), the cost of maintenance per km (maybe 5c/km) and depreciation (divide the chance in value over time by the kms you will drive).

With this detail, the rest is easy - our calculator will do the rest, and show you how it does it. See it here.

* This calculator was developed by Calculate.co.nz and is in our calculator toolbox as part of our partnership with them.

Remember we welcome robust, respectful and insightful debate. We don't welcome abusive or defamatory comments and will de-register those repeatedly making such comments. Our current comment policy is here.

Nice little calculator. I think the main point for me is "value of your time per hour". For example, when your children are young and you lose an extra few hours per week with them due to travel I think it's very hard to put a price on this. The same could be said for the value you may place on recreation - i.e. going for a walk/run/glass of wine at sunset on the balcony in the evening etc rather than commuting.

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Sure, but then consider the alternative - putting money into rent from which you get no long-term gain.

Paying off a cheaper mortgage, and spending more hours commuting, is still a better long-term decision. Your children might be glad they can borrow off the 'bank of mum and dad' when they reach their 20s and need a house deposit, also.

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I take it that you have done a comparison between those that rent and those that decide to take on home ownership, or is it just your investment strategy.
Last week Interest provided details of a couple 25-29 years , who purchased their first home June 2010, and the amount available (the gain) if they were to sell and move up the 'ladder.".My question would be, if a 25-29 year couple,(call them Gregorios and Jenefie ) decided to rent in June 2010 , initially sharing a 3 bed with another couple, or similar for the first 5 years, ( certainly not extraordinary), then were to rent alone a 2 bedroom for the remaining 5 years , how far behind after ten years would the rental couple be, than the couple who purchased their starter home .Gregorios and Jenefe would spread the equivalent twenty percent deposit, equally in two year bank deposit accounts and a Fisher Fund, (or similar New Zealand growth fund), and any annual difference between mortgage repayments and rent over the ten years be , if available, reinvested similarly. To make things simple Gregorios and Jenefe would always rent the national median rental home with rents rising annually.

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Nice idea. When you look at the savings of being able to work from home there is a significant swing in the "who cares were you live" camp. Accept this is limited to mainly white collar jobs like Banks, other finance, insurance, IT etc etc, but it is clearly underlined by the mass exodus from Awkland the day before each lock-down occurred.

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(divide the chance in value over time by the kms you will drive). Should that be change?

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Very cool. Of course if you get an EV some of these numbers become pretty irrelevant ;-)

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Really great calculator, well done Interest!

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But to add up all costs you would need to also include the difference in the property values between the two locations, and what that meant to take on the extra debt and interest from one over the other.

And how does it calculate the impact on others, which is the first input value, when it is highly unlikely the 'others' are going to exactly the same places of work.

Either way, it would show that buying in the CBD to work in the suburbs is more expensive than the opposite.

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