Making sense of this age-old conundrum.
There are good reasons to own your home, but there are also good arguments to rent. At the end of the day, the decision comes down to you.
- It’s an investment – Part of every mortgage payment comes off the principal of your mortgage loan, so you actually own a little more of your home with every payment. Once you pay your mortgage off completely, you’ve built an investment worth hundreds of thousands of dollars. You can live in it at relatively low cost or you can cash that nest egg in!
- It’s a forced savings plan - When you rent, you might save money each month compared to a mortgage, but if you’re not putting the difference away, those savings don’t accumulate. With home ownership, you get a place to live as well as an investment.
- It’s yours – Do you want to paint your bedroom hot pink? Go nuts! Knocking down a wall to put in that pool table you’ve always wanted? Great news! One of the big perks of home ownership is that it’s yours, and you can do pretty much anything you want with it.
- Buying can be risky – Real estate is known as a reliable investment, but like any investment there’s some risk. If the value of your home somehow falls below what’s left owing on your mortgage, you can end up over your head. When you rent, this just can’t happen. If you suddenly can’t afford your rent, you can just find somewhere new.
- No hidden costs – Did the pipes under your bathroom sink just explode? That can be a big pain, but the cost to fix it is 100% your landlord’s problem. When you rent, you know exactly how much it’s going to cost each month, no surprises.
- No commitment – If you could be leaving town in a few years, buying a home may not be a wise investment. Closing fees to buy and sell the home, as well as higher interest costs in the early days of your mortgage repayment, mean that it’s best to be in it for the long haul when buying a home. When you rent you can bail without much notice and you don’t have to worry about the headache and cost that can come with selling your home.
If you still have questions, call our Contact Centre at 1.866.863.6237. They can connect you with one of our mortgage advisors.