Today, many are wondering – what is more profitable: to rent or a mortgage? Buy a home with a long-term mortgage and spend money on your apartment or pay rent.
- There is an opinion that real estate will become more expensive in the future, and it is better to take a mortgage now, while apartment prices are low.
- In fact, simple arithmetic shows that you overpay the bank more than you pay rent.
- As a rule, buying a house and monthly installments with a commercial mortgage are 1.5-2 times higher than the rent
Buying a property.
Why is it profitable to buy real estate?
Prices in the real estate market are constantly growing, as statistics show, those who plan to solve the housing problem with the help of a mortgage should carefully weigh their options.
Moreover, advertising of mortgage lending on favorable terms is everywhere and it seems that buying an apartment now is more profitable than ever. At the same time, if you have made savings for a down payment, it may seem to you that it is time to apply for a mortgage.
Of course, buying a home is
- The ability to have a roof over your head regardless of external circumstances
- And also the opportunity to take care of the children, leaving something for them. Renting an apartment means giving someone your money.
The desire to have their own “square meters” is so great that many overestimate their strength, and then the euphoria from acquiring their own housing is soon replaced by stress and depression from the constant lack of money.
Calculate what is best for you.
- When calculating what is more profitable – to rent an apartment or buy, keep in mind
- The cost of renting an apartment
- The amount of your savings that you plan to make as a down payment
- The cost of the apartment you are going to buy
- Interest rate on a mortgage in a particular bank
- Interest on the deposit in the bank where you are going to keep your savings
Your age and likely salary or income increase
When calculating loan payments, do not forget to take into account inflation – it often plays into the hands of the borrower: the value of money falls and, if your loan is long-term, you pay a little less as a result.
Saving or mortgage?
This is better than taking responsibility for a 20 year loan, as in this case you should always have a stable income and no force majeure during this long period of time, so as not to lose your property.
When is the best time to rent an apartment?
Why is renting an apartment sometimes more profitable? The tenant does not bear large expenses for the repair and maintenance of housing, does not pay real estate tax, does not bear risks in case of force majeure (fires, floods).
Freedom of movement.
In addition, he remains mobile and free in terms of deciding to move to another area, city or country, while his own real estate acts as a kind of anchor that keeps the owner laid up.
In addition, the tenant can afford to live in the area of the city where it is more convenient for him, closer to work or to the park, while a monthly loan payment equal to rent will not give such an opportunity to choose.
Rent or buy an apartment – it’s up to you!
Summarizing all of the above, it must be admitted that those who think about their future, if possible, prefer to acquire housing in the property, rather than rent it.
Moreover, the state supports such initiatives by introducing not only credit programs, but also long-term lease programs with subsequent purchase. However, don’t jump headlong into mortgage bondage.