Owning vs. Renting
Click this "Rent or Buy Analyzer" to determine which is more economical, renting or buying, based on your payments and accomodation information.
Why am I using my hard-earned cash to pay the landlord's mortgage, when I could be using the rent money to buy a home of my own? That is a question many people ask themselves when they start thinking about moving out of the rental market and into home ownership.
Buying a home is a big step. For most people, taking out a mortgage is the biggest financial commitment they ever make in life. Buying your own home has always made sound financial sense, and will continue to do so. Here are some facts to consider when you start wondering why buying is better than renting:
· If you buy your first home at age 25, you will be mortgage free when you are 50, and sitting on a considerable asset. It could mean financial independence as a senior and the opportunity to enjoy your golden years.
- It is highly likely your investment will appreciate in 25 years. Don't make the mistake, however, of buying a home with the intention of making a quick fortune - think of home buying as a sound, long term investment. Choose a home that will make you happy while you live in it, and the financial benefits are a bonus.
- Buying a house is a painless way of saving regularly for 25 years. You are effectively putting away money for the future.
- Owning a home of your own means you can set down roots, get to know your community and involve yourself in it.
- Consider the alternative: if you pay $500 a month for a rental unit and face even a one per cent increase every year, after 25 years you will have paid a total of $170,000 and have nothing to show for it. Even if you face no rent increases, over 25 years you will have paid out a whopping $150,000.
- You may not need as much money as you think to get into the housing market: qualified buyers may buy a house with as little as five per cent down through the Canada Mortgage and Housing Corporation mortgage insurance program.