To rent or to buy? That is the question. At least in America, the mortgage rates are so dirt cheap that I think even folks who wouldn’t normally be in the position to purchase a home are considering how they can scrape together the funding to do so, in an effort to save thousands on a 30-year fixed rate mortgage. In the UK, mortgage rates are significantly higher, but that doesn’t mean that buying a house can’t be more cost-effective in the long run than renting. Fred Attewill of UK publication the Metro reported:
“Buying a property, paying a mortgage and maintaining a home costs an average of £429,000 over 50 years – not including its final value – compared with £623,000 in rent.
While it is cheaper to be a tenant at first, rents inflate over time and owning property means financial security in retirement as the buyer will own the home outright after 25 years, according to Barclays.
‘The initial cost of stepping on or moving up the housing ladder can be a big barrier for many but the long-term benefits hugely exceed the initial expense,’ said the bank’s head of mortgages, Andy Gray.
Mortgage payments account for half of the costs for the average first-time buyer the study is based on, with two fifths going on interest and the rest on capital repayment.
Despite differences in rents and house prices across the country, buying a home anywhere will save money in the long run.”
Americans, this article is for you as well! If you’re considering moving abroad, to a friendly, cultural and (most importantly) English speaking country, or even simply looking into a timeshare vs. purchasing a new home, I implore you to pay special attention to the perks of buying compared to renting. Now I’m just playing devil’s advocate here myself, but the man makes a good point!