Major Purchase Plan Template (Home or Car)

Plan a home or car purchase: needs, affordability ratios, savings plan formula, total cost of ownership, buy vs rent or lease, shortlist, timeline, risks

Особисті та PKMПовнийRegulation Z 12 CFR 1026.43; Directive 2014/17/EU Art. 18; Directive (EU) 2023/2225 Art. 18major purchase plan mathОновлено 24 жовт. 2026 р.

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Як використовувати: Use it 6 to 24 months before buying a home, car or other large item. Fill needs, current position and your own affordability limits first, then the savings plan and total cost of ownership before you shop. The main pitfall is treating the lender's maximum approval or the sticker price as your budget.

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Major Purchase Plan: [Home, car or other large purchase]

A plan for deciding whether, when and how to make a large purchase such as a home or a car: what you need, what you can afford, how much to save first, what the item really costs to own over the years, how it compares with renting or leasing, how you will pay for it, and the timeline to the purchase date. It uses plain language, standard formulas and a fully recomputed example for the fictional household Drew and Casey Morgan, a renting couple buying their first home (they are separate from the Ellison household used in the other personal templates). Affordability checks are framed around the lender-side rules on assessing a borrower's ability to repay (US Regulation Z, 12 CFR 1026.43; EU Directive 2014/17/EU Article 18 and Directive (EU) 2023/2225 Article 18), but the limits you set are your own. Replace every [bracketed] value and every row marked Example. This is a document format for organising your own information, not financial, tax, legal or investment advice. Projections are illustrative.

Document control

Field	Value
Document ID	[MPP-001]
Version	[0.1]
Status	[Exploring / Saving / Shopping / Decided / Purchased / Abandoned]
Owner	[@person-1]
Approvers/reviewers	[@person-2], [optional trusted adviser]
Last updated	YYYY-MM-DD
Classification	Private (household)
Purchase	[Home / Car / Other: description]
Target purchase date	YYYY-MM
Price range considered	[currency] [low] to [high]
Currency and unit	[currency], amounts rounded to 2 decimals unless stated

Approvals

Role	Name	Decision	Date
Household member	[Name 1]	[Agree / Disagree]	YYYY-MM-DD
Household member	[Name 2]	[Agree / Disagree]	YYYY-MM-DD

Revision history

Version	Date	Author	Change
0.1	YYYY-MM-DD	[@person-1]	First draft: needs and budget
0.2 (Example)	2025-10-25	Casey Morgan	Savings plan started
1.0 (Example)	2026-10-25	Drew Morgan	Shortlist, cost of ownership and financing added

Purpose and decision summary
Key terms in plain language
Needs, wants and deal-breakers
Where we stand today
Affordability check
Savings plan for the upfront cash
Total cost of ownership
Buy, rent or lease
Options and shortlist
Financing plan
Timeline
Risks and contingencies
Decision record
After the purchase
Local terms
References
Standard and licence note

1. Purpose and decision summary

Item	Value
The question	[Should we buy X, by when, and within what budget?]
Why now	[Life event, current item failing, price or rate window]
What happens if we wait	[Cost or risk of delay]
Decision summary	[Filled in at the end: buy / wait / rent / lease, budget, date]

Example: The Morgans rent a two-bedroom flat for USD 2,100 a month. They want a three-bedroom home near Casey's office and expect to stay about 7 years. Their question: can we buy a home of up to USD 375,000 by October 2026 without touching our emergency fund, and is buying cheaper than renting over 7 years? Summary after completing this plan: buy, budget USD 375,000, close in November 2026, financing from offer OFR-002 in the Loan Comparison.

2. Key terms in plain language

Term	Meaning in this plan
Down payment (deposit)	The part of the price you pay from your own money. The rest is borrowed.
Upfront cash	Down payment plus purchase costs: taxes on purchase, legal and registration fees, loan fees, inspections and moving.
Gross monthly income	Income before tax and deductions, per month. Many lenders use it for ratios.
Net (take-home) income	Income after tax and deductions; what you can actually spend. Your own budget should use this.
Housing cost ratio	Monthly housing costs divided by gross monthly income.
Debt-to-income ratio (DTI)	All monthly debt payments, including the new one, divided by gross monthly income.
Total cost of ownership (TCO)	Everything the item costs you while you own it: financing, running costs, upkeep, insurance, taxes and loss in value, minus what you get back when you sell.
Depreciation	The fall in an item's value over time. Cars usually lose value; homes may gain or lose.
Opportunity cost	What your money could have earned elsewhere if you had not spent it on this purchase.
Sinking fund	Money set aside regularly for a known future cost, such as a roof or new tyres.
Lease	Paying to use an item for a fixed period without owning it at the end, unless you buy it then.

3. Needs, wants and deal-breakers

ID	Requirement	Type	Why	Who asked
REQ-[NNN]	[Requirement]	[Need / Want / Deal-breaker]	[Reason]	[Name]
REQ-001 (Example)	Three bedrooms	Need	Home office for Drew, room for a child	Both
REQ-002 (Example)	Commute under 40 minutes to Casey's office	Need	Daily commute	Casey
REQ-003 (Example)	Garden	Want	Quality of life	Drew
REQ-004 (Example)	Flood-zone property	Deal-breaker	Insurance cost and risk	Both
REQ-005 (Example)	Major renovation needed	Deal-breaker	No savings for it in the first 2 years	Both

Write down the item you would buy if money were no object, then the minimum version that meets every need. The gap between them is where your budget decisions sit.

4. Where we stand today

Item	Amount	Source
Gross monthly income (household)	[currency] [amount]	Pay slips, tax return
Net monthly income	[currency] [amount]	Bank statements
Current monthly essential costs	[currency] [amount]	Budget (`personal/budget`)
Existing monthly debt payments	[currency] [amount]	Debt Payoff Plan (`personal/debt-payoff-plan`)
Emergency fund (ring-fenced)	[currency] [amount]	Emergency Fund Plan (`personal/emergency-fund-plan`)
Savings available for this purchase	[currency] [amount]	Savings account
Monthly amount we can add to purchase savings	[currency] [amount]	Budget surplus
Example: gross monthly income	USD 11,500	Both salaries
Example: existing debt payments	USD 600 (car USD 380, student loan USD 220)	Lender statements
Example: emergency fund	USD 30,000, ring-fenced	High-yield savings account
Example: savings for the purchase	USD 60,000 on 2025-10-25	Separate savings account

5. Affordability check

\text{Housing cost ratio} = \frac{\text{Monthly housing cost}}{\text{Gross monthly income}} \qquad \text{DTI} = \frac{\text{Monthly housing cost} + \text{Other monthly debt payments}}{\text{Gross monthly income}}

For a home, monthly housing cost includes loan principal and interest, property tax, home insurance, any mortgage insurance and any owners' association or service charge. For a car, use the loan or lease payment, insurance, fuel or charging, and parking.

Item	Our figure	Calculation
Loan principal and interest	[amount]	From Loan Comparison
Property tax per month	[amount]	Yearly tax / 12
Insurance per month	[amount]	Yearly premium / 12
Other housing charges	[amount]	[Service charge, mortgage insurance]
Monthly housing cost	[amount]	Sum
Housing cost ratio	[%]	Housing cost / gross income
DTI	[%]	(Housing cost + other debts) / gross income
Example: principal and interest	1,774.61	USD 300,000, 30 years, 5.875% (OFR-002)
Example: property tax	343.75	375,000 x 1.1% / 12 (assumed local rate)
Example: home insurance	116.67	1,400 / 12
Example: monthly housing cost	2,235.03	1,774.61 + 343.75 + 116.67
Example: housing cost ratio	19.4%	2,235.03 / 11,500
Example: DTI	24.7%	(2,235.03 + 600) / 11,500

Lenders must assess whether you can repay before lending: in the US, Regulation Z section 1026.43 sets minimum standards for most loans secured by a dwelling; in the EU, Article 18 of Directive 2014/17/EU (mortgages) and Article 18 of Directive (EU) 2023/2225 (consumer credit) require a creditworthiness assessment. Each lender applies its own ratio limits on top. Ask lenders for their limits in writing rather than relying on rules of thumb.

Your own test is the budget: after the new housing cost, can you still pay essential costs, keep saving for retirement and refill the emergency fund? Write the answer:

Test	Result
Budget still balances with new costs	[Yes / No, gap of amount]
Retirement saving continues at the planned rate	[Yes / No]
Emergency fund untouched after purchase	[Yes / No]
Payment still affordable if one income stops for 3 months	[Yes, from emergency fund / No]
Example	Yes to all four; the Morgans cut their holiday budget by USD 150 a month

6. Savings plan for the upfront cash

Target upfront cash = down payment + purchase costs + loan fees + moving and first repairs.

If you already have savings $S_0$ earning a monthly rate $i$ , after $n$ months they grow to $S_0 (1+i)^n$ . The monthly saving $D$ needed to reach the target $T$ is:

D = \bigl(T - S_0 (1 + i)^{n}\bigr) \cdot \frac{i}{(1 + i)^{n} - 1}

Item	Amount
Down payment	[amount]
Purchase taxes and legal costs	[amount]
Loan fees and points	[amount]
Moving, furniture, first repairs	[amount]
Target upfront cash $T$	[amount]
Savings today $S_0$	[amount]
Months to target $n$	[months]
Savings rate (yearly)	[%]
Monthly saving needed $D$	[amount]

Example: The Morgans set $T$ = USD 82,500 (USD 75,000 down payment plus USD 7,500 loan fees and point; moving costs come from the monthly budget). On 2025-10-25 they held $S_0$ = USD 60,000 in a savings account paying 3.5% a year (monthly rate 0.035 / 12). After 12 months that grows to USD 62,134.02, leaving USD 20,365.98 to save. The monthly saving needed is USD 1,670.11. They automated a transfer of USD 1,675 on each payday.

Savings progress log:

Month	Planned balance	Actual balance	On track?	Note
YYYY-MM	[amount]	[amount]	[Yes / No]	[Note]
2026-04 (Example)	71,181	71,950	Yes	Bonus added

Check of the planned balance: six monthly transfers of USD 1,675 at the end of each month from November 2025, on USD 60,000 earning 3.5% a year compounded monthly, give 71,181.25. Use the transfer you actually automated (1,675), not the rounded-down requirement (1,670.11), so that the log measures the plan you are following.

7. Total cost of ownership

\text{TCO} = \text{Upfront costs} + \sum \text{Running costs} + \text{Financing costs} - \text{Net resale value}

7.1 Home: example over 7 years

Assumptions (Example): price USD 375,000; loan USD 300,000 at 5.875% over 30 years; property tax 1.1% of price per year; insurance USD 1,400 per year; maintenance 1% of price per year (USD 3,750); value grows 3% a year; selling costs 5% of the sale price. The loan balance comes from the balance formula in Loan Comparison. All figures are illustrative.

Cost line	Calculation	Amount (USD)
Down payment	Own money	75,000.00
Loan fees and point	OFR-002	7,500.00
Loan payments, 84 months	1,774.61 x 84	149,067.24
Property tax, 84 months	343.75 x 84	28,875.00
Insurance, 7 years	1,400 x 7	9,800.00
Maintenance, 7 years	3,750 x 7	26,250.00
Total cash paid out	Sum	296,492.24
Sale price after 7 years	375,000 x 1.03^7	461,202.70
Selling costs	5% of sale price	23,060.13
Loan balance repaid at sale	Balance after 84 payments	268,313.75
Net proceeds from sale	461,202.70 - 23,060.13 - 268,313.75	169,828.82
Net cost of owning for 7 years	296,492.24 - 169,828.82	126,663.42

7.2 Car: example over 5 years

Assumptions (Example): price USD 32,000; USD 12,000 paid in cash; USD 20,000 borrowed at 6.9% over 60 months (payment USD 395.08); value after 5 years USD 14,000; 12,000 km a year.

Cost line	Calculation	Amount (USD)
Depreciation	32,000 - 14,000	18,000.00
Loan interest	395.081 x 60 - 20,000 (unrounded payment)	3,704.86
Fuel or charging	1,800 x 5	9,000.00
Insurance	1,200 x 5	6,000.00
Maintenance and tyres	700 x 5	3,500.00
Registration and road tax	250 x 5	1,250.00
Total cost of ownership	Sum	41,454.86
Per month	41,454.86 / 60	690.91
Per km	41,454.86 / 60,000	0.69

Note that the car TCO counts depreciation instead of the full price, because you get the resale value back. It does not count the interest the USD 12,000 could have earned elsewhere; add an opportunity cost line if that matters to you.

8. Buy, rent or lease

8.1 Home: buy versus keep renting, example over 7 years

Assumptions (Example): rent USD 2,100 a month rising 3% a year; if they keep renting, the Morgans invest the USD 82,500 upfront cash at 4% a year. To keep the example simple, it does not invest the monthly difference between owning and renting costs. Owning costs USD 2,547.53 a month in the first year (1,774.61 + 343.75 + 116.67 + 312.50) against rent of USD 2,100 rising 3% a year, so a renter would also have that difference to invest. This simplification favours buying by about USD 4,200 in the base case (the advantage falls from about 40,366 to about 36,150); state the direction of any shortcut like this next to the result.

Line	Calculation	Amount (USD)
Total rent over 7 years	Sum of 2,100 x 12 x 1.03^y for y = 0 to 6	193,094.05
Investment growth on USD 82,500	82,500 x 1.04^7 - 82,500	26,064.37
Net cost of renting	193,094.05 - 26,064.37	167,029.68
Net cost of owning (section 7.1)		126,663.42
Difference in favour of buying	167,029.68 - 126,663.42	40,366.26

Scenario table (fill in your own reruns):

Scenario	Price growth per year	Holding period	Investment return	Cheaper option
Base (Example)	3%	7 years	4%	Buy
Flat prices (Example)	0%	7 years	4%	[Rerun and record]
Early move (Example)	3%	3 years	4%	[Rerun and record]
[Your scenario]	[%]	[years]	[%]	[Buy / Rent]

Short holding periods usually favour renting, because buying and selling costs are paid only once and need years to be spread out.

8.2 Car: buy, finance or lease

Option	Upfront	Monthly	End of term	5-year cost	Notes
Pay cash	[amount]	[running costs]	Own the car	[amount]	Uses savings
Finance	[amount]	[payment + running costs]	Own the car	[amount]	See Loan Comparison
Lease	[amount]	[lease + running costs]	Return or buy	[amount]	Mileage limits, wear charges
Finance (Example)	12,000	395.08 + running	Own, worth about 14,000	41,454.86 (TCO)	Chosen baseline

9. Options and shortlist

Criterion	Weight	Option 1	Option 2	Option 3
[Need or want]	[%]	[score 1 to 5]	[score]	[score]
Weighted score	100%	[sum]	[sum]	[sum]

Criterion (Example)	Weight	OPT-001 Maple St	OPT-002 Birch Ave	OPT-003 Cedar Ct
Commute	30%	4	5	3
Condition (repairs needed)	25%	4	3	5
Price versus budget	25%	4	3	5
Garden	10%	5	2	3
Neighbourhood	10%	4	4	3
Weighted score	100%	4.10	3.60	4.00

Check of the example: OPT-001 = 0.30 x 4 + 0.25 x 4 + 0.25 x 4 + 0.10 x 5 + 0.10 x 4 = 1.20 + 1.00 + 1.00 + 0.50 + 0.40 = 4.10. OPT-002 = 1.50

0.75 + 0.75 + 0.20 + 0.40 = 3.60. OPT-003 = 0.90 + 1.25 + 1.25 + 0.30 + 0.30 = 4.00.

Option	Price	Deal-breakers passed	Weighted score	Inspection result	Status
OPT-[NNN]	[amount]	[Yes / No]	[score]	[Summary]	[Shortlisted / Rejected / Offer made]
OPT-001 (Example)	USD 375,000	Yes	4.10	Roof has about 8 years left	Offer made

10. Financing plan

Item	Value
Source of funds	[Savings / Loan / Mix]
Loan comparison reference	[LOAN-CMP-NNN, decision DEC-NNN]
Lender and product	[Name, product]
Loan amount	[amount]
Rate and type	[% fixed / variable]
Monthly payment	[amount]
Rate lock or offer expiry	YYYY-MM-DD
Example	LOAN-CMP-001, DEC-001: Lender B, 30-year fixed at 5.875%, USD 300,000, USD 1,774.61 a month; offer accepted 2026-10-30 (before its 2026-11-05 expiry) and rate locked for 30 days to 2026-11-29, which covers closing on 2026-11-20 with nine days to spare

11. Timeline

ID	Milestone	Target date	Owner	Done
MS-[NNN]	[Milestone]	YYYY-MM-DD	[@owner]	[Yes / No]
MS-001 (Example)	Upfront cash reached	2026-10-25	Casey	Yes
MS-002 (Example)	Loan decision recorded	2026-10-30	Drew	No
MS-003 (Example)	Closing	2026-11-20	Both	No

12. Risks and contingencies

ID	Risk	Likelihood	Impact	What we will do
RSK-[NNN]	[Risk]	[Low / Medium / High]	[Low / Medium / High]	[Action or limit]
RSK-001 (Example)	Valuation comes in below price	Medium	High	Renegotiate or walk away; no extra borrowing
RSK-002 (Example)	Inspection finds major repair	Medium	High	Ask for price reduction; walk away if above USD 10,000
RSK-003 (Example)	One income lost in first year	Low	High	Emergency fund covers 6 months of essentials
RSK-004 (Example)	Rates rise before lock, or closing slips past the lock end date	Medium	Medium	Lock the rate when the offer is accepted (done 2026-10-30, to 2026-11-29); ask the lender now what a 15-day extension would cost
RSK-005 (Example)	Unexpected first-year costs	High	Low	USD 3,750 maintenance sinking fund from month 1

Walk-away rules: write the conditions under which you will stop, so that the emotion of a near-finished deal does not override them.

[Price above our maximum of amount]
[Any deal-breaker from section 3 discovered]
[Emergency fund would be used for the purchase]

13. Decision record

Field	Value
Decision ID	DEC-[NNN]
Decision	[Buy option X / Wait until date / Rent / Lease]
Date	YYYY-MM-DD
Price agreed	[amount]
Reasons	[Reasons]
Alternatives rejected	[Option: reason]
Conditions	[Subject to inspection, valuation, financing]
Example	DEC-MPP-001, 2026-10-25: offer on OPT-001 at USD 375,000, subject to inspection and valuation; buying beats renting by about USD 40,000 over 7 years in the base case; OPT-003 rejected for a 50-minute commute

13.1 Review points before you sign

Before signing the final contract or loan agreement, read sections 3 to 12 again with a second person and check each of the points below. Large purchases go wrong less often from bad arithmetic than from a condition that changed quietly between the first plan and the signing date.

Price and condition. The final price, the inspection or survey result and any agreed repairs are written into the contract, not only promised in conversation.
Financing. The loan amount, rate, term, fees and the rate-lock end date in the final documents match the offer you chose in Loan Comparison (personal/loan-comparison). Compare the final disclosure line by line with the earlier one and ask about every difference.
Cash. The upfront cash is in an account you can move from on the day, and the emergency fund is untouched. Spending the emergency fund on closing costs leaves the household exposed in the first, most expensive months of ownership.
Affordability. The monthly cost of ownership in section 5 still passes your own limits with the final figures, including property tax and insurance.
Insurance. Cover starts on the day you take ownership, and the lender's requirements for it are met.
Timeline. Every date in section 11 still fits: in particular, the closing date is before the rate lock ends, and the move date does not depend on a step outside your control.

Common errors to avoid. Stretching the budget because a seller or dealer has set the price anchor; assuming both incomes are certain for the whole loan term; ignoring running costs that the old home or car did not have; and making the decision under time pressure created by someone else's deadline. If any point above fails, delay the signing rather than accept a plan that no longer passes your own tests.

14. After the purchase

ID	Task	Due	Owner	Done
AFT-001	Update the budget with all new running costs	First month	[@owner]	[ ]
AFT-002	Start a sinking fund for maintenance or replacement	First month	[@owner]	[ ]
AFT-003	Store purchase contract, title, warranty and loan documents	First week	[@owner]	[ ]
AFT-004	Review insurance cover (`personal/insurance-review`)	Before handover	[@owner]	[ ]
AFT-005	Update the net worth statement	First quarter	[@owner]	[ ]
AFT-006	Start a maintenance log (`personal/home-maintenance-log`)	First month	[@owner]	[ ]
AFT-007	Rebuild the emergency fund if it was used	Within 12 months	[@owner]	[ ]
AFT-008	Compare actual costs with the TCO estimate	After 12 months	[@owner]	[ ]

15. Local terms

Names only, as of 2026-10. Examples, not exhaustive, not advice. Check local rules.

Jurisdiction	Purchase tax on homes (name)	Typical home-buying documents	Car-related terms
United States	Transfer tax (state or local), recording fees	Loan Estimate, Closing Disclosure, title insurance	Sales tax, registration
United Kingdom	Stamp Duty Land Tax (England, NI), LBTT (Scotland), LTT (Wales)	Mortgage illustration, survey, conveyancing	Vehicle Excise Duty
Germany	Grunderwerbsteuer	ESIS, notary contract	Kfz-Steuer
France	Droits de mutation (frais de notaire)	ESIS (FISE), compromis de vente	Carte grise
Australia	Stamp duty (state)	Key facts sheet, contract of sale	Registration (rego), stamp duty on vehicles
[Your country]	[Name]	[Names]	[Names]

16. References

US Regulation Z, 12 CFR 1026.43 (minimum standards for transactions secured by a dwelling, including the ability-to-repay requirement), eCFR, checked 2026-10-25.
Directive 2014/17/EU on credit agreements for consumers relating to residential immovable property, Article 18 (creditworthiness assessment), EUR-Lex.
Directive (EU) 2023/2225 on credit agreements for consumers, Article 18 (creditworthiness assessment), applying from 2026-11-20, EUR-Lex.
Related templates: Loan Comparison (personal/loan-comparison), Budget (personal/budget), Emergency Fund Plan (personal/emergency-fund-plan), Financial Goals (personal/financial-goals), Net Worth Statement (personal/net-worth-statement), Insurance Review (personal/insurance-review).

Standard and licence note

Based on public law on lenders' assessment of a borrower's ability to repay: US Regulation Z (12 CFR 1026.43, a US federal work in the public domain) and Directives 2014/17/EU and (EU) 2023/2225 (source: EUR-Lex, https://eur-lex.europa.eu, reuse with acknowledgement). Rules are cited by section and article number and described in original words. The savings, ratio and cost-of-ownership formulas are standard mathematics, and every assumption in the examples is fictional and illustrative. This template is original text written for this collection and is not financial, tax, legal or investment advice. Check the current official version of each law and local rule before use. Template licence: MIT.

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