Tiny Versus Traditional: The Cost Difference

They’re many benefits to be enjoyed with a tiny house. The more obvious benefit is the cost factor. The price difference between a tiny house and a traditional house is more than just the purchasing costs. Since many owners of a tiny house have arranged to park their home on land owned by family or friends, we will exclude the cost of land in this comparison.

Pera report from CBS News, an average size traditional home is approximately $156,000 and $25,000 for a tiny home. The numbers that we’re going to review here are based on an average priced home and the average interest paid for 30 years for traditional, and 15 years for a tiny house. Both types of housing vary based on the upgrades.

Cost of a traditional house = $156,000
Cost of a tiny house = $25,000

Interest paid on a traditional house with a 30-year loan= $128,636.87
Interest paid on a tiny house with a 15-year loan = $9,424.70

Total paid for a traditional house considering costsand interest = $284.636.87
Total paid for a tiny house considering costs and interest = $34,424.70

For the non-math person, what these numbers tell us is that a tiny home costs approximately 12% of what an average traditional home costs. When we consider the mortgage, or rent for an average American family, it consumes as much as 30% or more of their total income. This is paid before they buy food or pay utilities.

So, if anyone considering buying a home would take a look at a tiny house, by sacrificing the square footage that a traditional home offers, they could pay it off quicker. This would allow them to focus on their other financial efforts like retirement and vacations.

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