Is a Mortgage Cheaper Than Renting?
When is a mortgage cheaper?
A rising property market can result in cheaper mortgages as more properties are up for sale. As supply increases, demand decreases. Homeowners have to lower the price of their home to entice buyers to purchase their property in a saturated market.
When is renting cheaper?
Renting may be cheaper when the prices of homes are rising. When homeowners can afford to keep their property price at the estimated value, continuing to rent can be cheaper. It can also give you time to save for a larger deposit, which can lower your mortgage repayments down the road.
Items to consider
There are many factors to consider when assessing whether it is cheaper to buy a home or continue renting. One factor is location. The area in which you live can affect both the cost of rent and property. In high-density areas, it may be cheaper to continue renting than to purchase a home.
Another factor to consider is the overall cost of renting. For example, a 30-year mortgage could end up being cheaper than renting for 30-years. While interest rates on mortgages can be negotiated over the period of the loan, rental costs cannot. Unless you want to move every time your rent is increased, it might end up being cheaper to purchase a home.
Deciding when it is the right time to buy a home can be stressful. Instead of trying to calculate whether it’s cheaper to rent or buy on your own, consult with the experienced brokers at Mortgage House. We are experts in the property market and have tools to help you compare the cost. We can help you determine when it is time to buy by factoring the property values, market demand, fees, your deposit and whether or not you have to pay Lenders mortgage insurance.