Today we are asking the age-old question of whether it is cheaper to own than rent a property the honest answer to the question is yes and no.
There are several factors that weigh in when making the decision to own or rent. How long do you plan to live in your current city or town? If you plan to move somewhere else – either for work or for other reasons – in the next two years, then you would maybe better off waiting to buy a house.
Next, your financial situation is something that directly affects your readiness to buy a home. In most cases, you’re better off having a sizeable down payment – of at least 5% and perhaps more – to reduce the amount of the mortgage you’ll need. In some cases down payment assistance may be a great benefit to being able to buy a house now instead of later.
There are other questions you can ask yourself as well, how important is it that you have a feeling of ownership, or to make changes to the house? Do you think real estate prices are going up or down? What will happen with inflation? These are important questions.
Your yes and no answers go up and down like a see-saw. Even the facts can sway you in either direction.
Experts explain that homeownership remains cheaper than renting with a traditional 30-year fixed-rate mortgage in the 100 largest metro areas in the United States. Second, the fact that interest rates are near historic lows, while rents are at astronomic levels in many urban areas, also tilts the balance in favor of buying by any objective standard.
On the flip side, if you decide renting is the right choice for you, we can dispel a few myths for you. If you’re one of the people who think that renting is simply paying someone else’s mortgage, think of it this way. You have to pay money for someplace to live, period. Whether you’re paying rent to your landlord or giving mortgage payments to your bank.
Renting gives you flexibility, it oftentimes affords you to live in locations that you otherwise might not be able to financially and you don’t have maintenance costs, you don’t pay property taxes, you don’t pay interest on a mortgage, and renter’s insurance is a pittance compared to homeowner’s.