Renting vs buying
Is homeownership for you? You need to look at much more than the cost of rent or a mortgageMortgage A loan that you get to pay for a home or other property. Often the loan is for 20 years or more. You make a set number of payments for a set amount each year.+ read full definition payment to know for sure.
A quick comparison
| Renting | Buying | |
| Costs | Likely lower monthly costs
Fixed monthly costs Pay a deposit of a month’s rent May pay a deposit for damages |
Likely higher monthly costs with mortgage, property taxes, utilities, maintenance, furnishing and decorating
Pay interest to the bank on mortgage Possible unexpected repair costs |
| Investment potential | Rent money goes to your landlord | Build equity as you pay off mortgage |
| Income potential | May be able to create income by renting out rooms or subletting | Can create income by renting out or borrowing against your home |
| Maintenance | Not responsible for maintenance, but dependent on landlord to make timely repairs | Responsible for maintenance and repairs |
| Commute | Higher rents in prime areas but you save time and money on commute | Affordable houses in suburban areas mean you spend more time and money on commute |
| Flexibility to move | Can move out almost whenever you want | Harder to move quickly as can take time to sell
May face a mortgage penalty |
4 questions to ask yourself
- What kind of housing are you looking for?
- How much can you afford?
- How soon do you think you’ll move again?
- How important is home ownership for you?
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