A home costs more than its price tag
Distinguish purchase price, borrowing cost, monthly ownership costs and upfront cash.
Materials: calculator page, paper or this response sheet, and a basic calculator. “Keep for comparison” preserves up to three scenarios while that calculator tab stays open.
Prepare the fictional setup
Use the listed settings and explicitly select a custom 6.71% rate; a live benchmark would change the answer.
Complete setup reference
| price | 350000 |
|---|---|
| down Percent | 10 |
| rate | 6.71 |
| years | 30 |
| loan Type | conventional |
| va Use | first |
| finance Fee | true |
| tax Percent | 1.1 |
| annual Insurance | 1800 |
| monthly Hoa | 0 |
| pmi Percent | 0.5 |
| maintenance Percent | 1 |
| closing Percent | 3 |
| extra Cash | 1500 |
| reserve Months | 3 |
| savings | 0 |
| gross Income | 0 |
| monthly Debts | 0 |
| custom Upfront Fee | 0 |
| custom Monthly Insurance | 0 |
Typed responses stay in this tab. Save a PDF to keep your work. Do not enter real household or student financial information.
Warm-up · 5 minutes
List costs of owning a home besides the price. Which occur once and which repeat?
Investigate · 25–40 minutes
Step 1
Use the fictional setup below. Choose Conventional and Custom rate; enter 6.71%. Do not use a changing market benchmark for this activity.
Step 2
Record monthly principal and interest, full monthly cost including upkeep, and cash target. Explain why they differ.
Step 3
Keep this scenario, then change the down payment from 10% to 20%. Compare monthly cost and initial cash.
Step 4
Return to 10% down. Increase the custom rate to 8%. Keep the new scenario and explain the change.
Discuss & reflect · 10 minutes
Could the smallest monthly payment still be the wrong choice for a buyer?
Extension
Use the reverse-price tool to hold the full monthly budget at $2,500. Explain why that price is not a lender approval.
Teacher guide and assessment
Expected reasoning
A larger down payment reduces borrowing and can remove conventional PMI, but ties up more cash. A higher interest rate increases the payment with the same price and term. Neither result verifies loan eligibility.
Use the calculator’s breakdown to check rounding. The teacher explanation is tied to the fictional setup above, not to any learner’s edited scenario.
Optional coding extension: send the corresponding fictional JSON example through the API documentation. Compare the response with the browser calculator and explain the calculation-version field.
Quick assessment · 6 points
- 2 points: accurate calculations with units and labeled scenarios.
- 2 points: explains how changing one assumption changes the result.
- 2 points: supports a conclusion with evidence and names a limitation.
Support: work through one scenario together and use a simple table. Challenge: ask the learner to find a counterexample or solve a target by hand. These are flexible suggested grade bands, not a standards-alignment claim.
Methods & sources
Formula explanations, assumptions and source links are on the calculator page. This is an educational activity, not a recommendation to borrow, invest or make a purchase.