Today, we are going to discuss an important question that many people ask when considering their housing options: Is it cheaper to buy or rent?
As we all know, property prices have been steadily increasing over the last few years, making it difficult for many people to purchase their first home. Additionally, interest rates have also been rising, which means higher mortgage payments for those who do decide to buy.
On the other hand, rental prices have been increasing as well, but not as fast as interest rates. However, the influx of new residents into Australia each year is putting pressure on rental prices, which means they will likely continue to rise in the long term.
If you’re paying $500 per week in rent, that’s $25,000 per year and $250,000 over the next ten years. This is a significant amount of money to be paying towards rent, especially when you consider that this amount will likely increase due to inflation and rental increases.
In the long term, owning a property can be more affordable than renting, as your mortgage payments will remain fixed or even decrease over time, while rental prices will continue to rise.
This means that in 10 to 15 years, your mortgage payments will likely be significantly lower than the equivalent rental costs.
Of course, purchasing a property is not without its challenges, particularly when it comes to saving for a deposit.
However, there are ways to make this process easier, such as buying a property jointly with someone else or rent vesting.
It’s important to have a plan and speak to a financial specialist about your borrowing capacity and what you need to do to achieve your deposit or borrowing capacity figure to purchase a property.
The long-term benefits of owning your own home far outweigh any short-term costs or challenges.
So, is it cheaper to buy or rent? The answer depends on your individual circumstances, but taking the long-term view, owning a property can be a smarter financial decision.
If you know anyone who is considering buying their own home, please share these tips with them to help them make an informed decision.
Thank you for reading, and we’ll see you next Tuesday for more Top Tips.
If you would like to discuss your property options further click here.
Regards,
Geoff Tomkins
Buyers Advocate
PH: 0404 852 781
