Is Renting Cheaper Than Buying a Home?

April 3, 2023

Your lease is up or going up in price and you’re faced with the classic question- do I continue renting or is it time to buy a place of my own? Most people want to buy a home of their own but think they are in a spot financially where renting makes more sense. While this can sometimes be true, renting is not always the cheaper option. Let’s take a look at why buying a home can be the better financial decision!

  • As inflation causes rent to rise, principal and interest payments on fixed-rate mortgages stay the same. With inflation continuing, it is likely that rises in rent will follow suit. Principal and interest payments on a fixed-rate mortgage, on the other hand, will not fluctuate, allowing you to save that extra money to put towards other monthly living costs.
  • You might qualify for as little as a 0% down payment mortgage. One of the most common roadblocks to buying a home is not having the 20% down payment. Luckily, there are many mortgage products out there that require less or even as low as 0% down. Check out Northern’s mortgage options to find the right one for you!
  • Build equity with mortgage payments! Each monthly rent payment you make is likely going towards your landlord’s mortgage. Buying a home our your own will allow that payment to help build equity.
  • Enjoy property value appreciation. With the current housing market, your home’s value will likely appreciate, even without you making any improvements, meaning more cash in your pocket when you go to sell later on.
  • Take advantage of tax benefits. As a homeowner, you may be eligible for annual tax benefits. Learn more about the different types of tax benefits.
  • Have more freedom in your living space! Owning doesn’t have just financial advantages. When you own your own home you can enjoy the freedom to make any changes to the home from smaller projects like painting the walls to larger ones like adding an addition for more room. Have pets? Finding a landlord that allows furry friends can not only be difficult but expensive as there is usually an extra security deposit or increase in rent. The options are endless as a homeowner!