Is Buying More Affordable Than Renting?

One of the biggest dreams that most people have is to own a home of their own. If you have ever rented somewhere you will know the restrictions that occasionally come with it - no pets, no decorating without prior permission, and if you don't like the fitted kitchen there isn't often much you can do about it.

That's why buying your own home is so desirable, because you have a lot more freedom when you own the four walls that surround you. But of course it is a big responsibility from a financial point of view and it is important to make sure you are well prepared for that aspect in advance.

If you are currently renting you will need to work out whether buying is going to be more affordable for you. But it's not just a case of looking at your current situation; you should also look at what you are investing in for the future. After all, you could stay in your rented accommodation for twenty years and still not own it, whereas making the decision to buy somewhere would mean that you would almost have finished paying for it by the time those twenty years are up. What's more you would have accumulated a considerable amount of equity in the property by then as well.

This is why it's worth making a list of all the expenses involved with renting and all the expenses involved with buying a property, so you can see what the best option is for you. For example it's a good idea to have some cash put aside to pay for any repairs that need doing to your home if you do decide to buy. If you are renting you wouldn't need to worry about this as your landlord would be responsible for any repairs. But on the other hand even when repairs need doing you are still investing in your house and making sure it is well looked after so it doesn't lose value in the future.

Make sure you don't overstretch yourself when trying to work out how much you can afford to borrow to buy a house. Other household costs such as gas and electricity are also subject to change and you don't want to be so close to the maximum amount you can afford that you run into problems as soon as interest rates creep up even a tiny amount.

In many ways, investing in a property of your own is the same as investing in any other savings method. If you had a savings account for twenty five years and cashed it in, you would have earned a reasonable amount of interest on it in that time. But if you had a mortgage on a property that you paid over the same amount of time, you can virtually guarantee that the price of your property would far exceed any savings account you could get.

So it seems buying a home of your own is more affordable and makes a good long term financial goal as well.