Looking to build or buy your first home? Congratulations, it is a huge and exciting step. However, it is important to ensure you’re making the right decision and have considered all the pros and cons of renting versus buying before making such a huge commitment.
Renting: the pros
Frees up your savings – choosing to continue renting means you don’t have to invest all your savings into your house deposit and frees up money to potentially invest whereby you may be able to generate a greater return on investment.
Flexibility to live anywhere – renting allows you more flexibility to move as the costs of relocating is a lot lower than if you were to buy a house.
Renting: the cons
Renting can be more expensive – the cost of renting is steadily increasing over the years due to inflation and housing availability. However, you don’t have to consider additional expenses such as rates and maintenance.
Buying: the pros
Stability – buying a home provides you with the stability and security of knowing that your landlord isn’t going to kick you out or sell the house out from underneath you.
Freedom – it also allows you the freedom to renovate and redecorate your home to your liking.
Equity – buying a home also enables you to have an asset that will likely appreciate over time, thereby enabling you to grow your equity. Building equity can also enable you to invest in additional investment properties or shares later down the track.
Buying: the cons
Interest – a significant portion of the payments you make towards your mortgage generally go towards interest and fees.
Opportunity Cost – the opportunity cost of having your money tied up in your property when you could have used it in other investments. It can make travel, going back to study, or even starting a business near impossible because you have minimum monthly mortgage repayments that you ‘have’ to make.
Are you better off renting or buying? Find out now!
The decision of whether to continue renting or buying a home is not a simple one. Many factors can influence the decision and what may be right for you, may not be right for the next person. It is a personal decision and one that shouldn’t be taken lightly.
Before you make a decision regarding whether to rent or buy, check out our Rent vs. Buy Calculator to see whether you would be better off renting or buying given your current circumstances. Alternatively, give us a call on 1800 538 287 to arrange an obligation-free chat about your home loan options.
Use Our Home Loan Calculators to Calculate Your Perfect Home Loan
We have a suite of home loan calculators to help you get a better idea of how much you can borrow and what you can comfortably repay, simply choose from the options below.
