Not financial advice. Mortgage FV Calculator is a software calculator, not a personal-finance product or advisory service. It computes standard financial functions and displays the results for your convenience. Nothing here constitutes, or is intended to constitute, financial, investment, tax, legal, mortgage, credit, or insurance advice. Always consult a qualified professional before making any financial decision.
NPV of buying a home in Alabama
Every cash flow of owning a median-priced Alabama (AL) home — payments out, rent avoided, equity and sale proceeds in — discounted at 5% and compared with the same money invested elsewhere.
Positive NPV: the purchase clears the hurdle
At 6.75% on a 30-year loan with 10% down, the net present value works out to $114,117, an internal rate of return of 9.06%. That means the deal beats putting the same cash into a 5% alternative — provided the 3.5% appreciation and $1,350 rent assumptions hold.
Valuation
| NPV at a 5% discount rate | $114,117 |
|---|---|
| NPV at the Fisher-adjusted real rate (2.44%) | $296,478 |
| IRR (nominal) | 9.06% |
| IRR in real terms | 6.40% |
The real row re-runs the same cash flows at the Fisher-adjusted discount rate — 2.44% once 2.5% inflation is removed from the 5% nominal hurdle. A lower hurdle values distant equity more highly, which is why the real figure is the larger of the two.
The inputs behind it
| Median home price | $230,000 |
|---|---|
| Loan amount | $207,000 |
| Principal & interest | $1,343/mo |
| All-in monthly (PITI + PMI) | $1,714/mo |
| Rent avoided by owning | $1,350/mo |
| Total interest over the term | $276,335 |
| Projected home value at payoff | $645,563 |
0.4% effective property tax, $2,400 annual insurance, 3% closing costs, 6% selling costs and 1% annual maintenance. Illustrative averages, not quotes.
What is specific to Alabama
The lowest effective property tax rate in the country, offset by storm-exposed insurance premiums along the Gulf.
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NPV in other states
- Alaska
- Arizona
- Arkansas
- California
- Colorado
- Connecticut
- Delaware
- Florida
- Georgia
- Hawaii
- Idaho
- Illinois
- Indiana
- Iowa
- Kansas
- Kentucky
- Louisiana
- Maine
- Maryland
- Massachusetts
- Michigan
- Minnesota
- Mississippi
- Missouri
- Montana
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- Nevada
- New Hampshire
- New Jersey
- New Mexico
- New York
- North Carolina
- North Dakota
- Ohio
- Oklahoma
- Oregon
- Pennsylvania
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- South Carolina
- South Dakota
- Tennessee
- Texas
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- Virginia
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- West Virginia
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