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.