November 16, 2010

Rent vs Mortgage? Which is financially better off?

By Planet Wealth

Hi! I’m a homestarter, I would like opinions on whether it is more financially beneficial in the long run to rent or to buy a new home?
Is renting and investing into shares an alternative way to build growth in assets.
Or is it better to own a home?

Topics: renting shares | 4 Comments »

4 Responses to “Rent vs Mortgage? Which is financially better off?”

  1. Shoe Lace Says:
    November 16th, 2010 at 12:50 pm

    Better to own a home if you are sure you can afford the mortgage payments. Not only are you paying to live there but your payments become an investment.
    But if you are on shaky financial ground.. like maybe your income is not so stable and have a possibility of lose your job or maybe you want to travel for a while before you choose to settle down then renting is certainly the way to go.

  2. sophieb Says:
    November 16th, 2010 at 12:50 pm

    These days when the country is in a financial downturn and double digit inflation around the corner I’d say renting is much better for now. It used to be that buying a home was the best thing to do but these days with people losing their jobs they also then lose their home and ruin their credit. Right now interest on savings is about nil. The stock market has been poor for several years now. It’s time to just sit tight, place your money into savings and let it sit there even if it doesn’t earn interest. Do not run up debt.

  3. Ghost of Zeuz Says:
    November 16th, 2010 at 12:50 pm

    You need to calculate the specific numbers. For example, if it costs $1 / year to rent, then I’d say rent is better. The more right question is "At what point is the renting and owning financially neutral if it costs $Y to rent (or $Z to own)?"

  4. Patrick Says:
    November 16th, 2010 at 12:50 pm

    You can download a free Home Rent or Buy Analysis Calculator to work out the difference between renting a property and buying a home in the long run from this website:

    http://www.investmentpropertycalculator.com.au/free-home-rent-or-buy-analysis-calculator.html

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