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Renting vs Buying?

Mortgage or rent?

Buying your own home is a huge decision. So it’s important to weigh up the pros and cons of owning first.

Benefits of owning

  • Once you’ve paid off your mortgage, your home will be yours and you won’t have to worry about paying for somewhere to live.
  • If your home increases in value you could use the equity to help buy a bigger home or fund a comfortable retirement.
  • You can spend money improving your home and increasing its value without having to ask a landlord.
  • Sometimes it can be cheaper to buy than rent.

Potential downsides of owning

  • It’s a big commitment – you need to be sure you can afford what you’re taking on.
  • If the value of your home falls, you may be unable to sell if you owe more to your mortgage lender than your home is worth.
  • When interest rates rise, your repayments will go up. It’s important you’re prepared for a rise.
  • You need to be sure you can afford maintenance costs like fixing a broken boiler or leaky roof.
  • If you stretch your budget when you buy you may not have money for meals out, holidays and entertainment.
  • You have less flexibility than when renting. For example, selling up and moving is more expensive as you have estate agency and legal fees to pay.
  • It may not always be easy to sell your home, depending on what’s happening in the market.
  • If you’re living with someone and split up, deciding what to do with the property can be complicated and expensive.