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Message Subject Mortage vs Apartment living cost
Poster Handle Gnosis 2020
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A couple more things to consider..

You will be paying property taxes whether you rent or own. Ownership pays directly to government and renting just passes those taxes through to rent costs (you know that no landlord will just suck up that expense).

Same thing goes for interest expenses. Keep in mind many rental real estate loans are variable rates which means your rent will go up as rates increase, but will not go down in most cases.

In the US, you can subtract your personally paid mortgage interest and property taxes from your earned income for income tax determination. Net, this means that you get about a 40% real dollars discount on taxes & interest... Depending on your income it could be higher or lower, but this is about average all-in net savings.

Ownership is typically a non-equity building option in the first 5yrs of commitment the way banks charge interst in amortization tables. When you factor in listing costs and filing fees, there is little if any financial benefit to ownership if time expectation is under 5-10 years. There are exceptions to this to the upside of course, but there are exceptions to downside as well.

Hope this cuts the hype a bit!

rant
 Quoting: Gnosis 2020


One more thing is inflation. If rent increases average a paltry 3% annually, your payments will be double in 24 years. Assume the same increase in taxes and upkeep, and your real ownership costs will increase only about 33% in the same period assuming a fixed rate loan. This is because planners assume that 1/3 of home owners budget expenses should go toward upkeep, taxes, fees, etc and only 2/3 towards principal and interest.

The longer you keep your owned residence, the better the financial numbers work toward ownership.

Of course this is all subject to government impacts which can throw off all of this!
 
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