Would you buy if mortgage payment is 2x rent?

peachyprice

£1.5k is a huge mortgage payment on a 1 bed place. I'd be inclined to stay in the rented, £750 for a 1 bed is reasonable, and save as much of the other £750 per month for an even larger deposit on a house your family can grow with.

Yes prices might increase in 3-5 years, but you'll have another £27-45k to put towards a better size house.

jay7_2

You may find this calculator useful:
Should you BUY or RENT a property?

pinkshoes

Our interest portion of the mortgage is 64% of what we would have paid in rent, so saving us a lot of money, plus we get our own place.

On the other hand, we have two large bedrooms and a decent sized living space, and I would never ever consider buying a 1 bed property, as they're too restrictive in terms of future plans.

Why not keep saving until you can afford 2 bedrooms or more?

Soot2006

We just bought a house, because our total monthly mortgage payment (interest + capital repayment) would be £100 under total monthly rent. Utilities are all the same anyway, mortgage is fixed for 5 years ... We feel £100 richer than before which will pay for the dog we weren't allowed to have in the rental.

Simplez!

Mr_Matey

Soot2006 wrote: »

We just bought a house, because our total monthly mortgage payment (interest + capital repayment) would be £100 under total monthly rent. Utilities are all the same anyway, mortgage is fixed for 5 years ... We feel £100 richer than before which will pay for the dog we weren't allowed to have in the rental.

Simplez!

Sounds like a good deal! How much of a deposit did you put down though?

You should feel more than £100 richer as you are paying off the capital as well. So long as prices don't fall that is...

izzybusy23

SailorSam wrote: »

In the past i would never have thought that renting would be a better deal, you are after all throwing money into an empty well. If you buy your house it's not just a home but an investment for the future, something that you can pass onto your children. After all when you grow old the house should be paid for and you'll not have the worries of paying rent from a small pension.

However as i get older i see the downside, i don't have children so it's others who will benefit. When i get to pension age, if i was renting, i'd receive extra benefit so wouldn't have that worry. If i have to go into a care home my house may need to be sold to pay the fees, the person next door who may be a tenant would have his fees paid for.
It's similar to the small personal pension that i paid into, at some point in the future this is going to prevent me getting additional benefits on top of my pension.

So i wonder now if i hadn't bought my home, just as if i hadn't paid into that pension, if i'd used that money for extra holidays or even nights out in the pub, would i have been better off in the future.
Spend now, to hell with the future.

Fantastic post.. very logical. :T

izzybusy23

amalis wrote: »

yeah, about right.
Its is 900 rent and 1500 mortgage. + bills

:eek: How much do you earn? Me and DH earn nearly £50k per annum and there is NO WAY I would ever consider a £1500 a month mortgage on a 4 bed house, let alone 1 bedroom!! Are you completely nuts? It makes absolutely no financial sense at all. Save the extra £900 a month and wait until you can afford something far better than a 1 bedroomed place.

TighterThanTwoCoatsOfPain

woh, longer than I thought and only my take on it... no doubt some folks will disagree.

Far too many things to take into account for randoms on the internet to answer for you.

A question i'd ask is, if you continue renting, are you comfortable that you will be able to maintain paying that amount in rent (and possibly much more/less, noone knows the cost of renting in x amount of years) when you retire?

I poster above mentions the benefits they will receive.. I dont know how old you are, but I'm not counting on being given a penny by the time i'm that age, but will only need to manage to pay the bills as mortgage will be gone in 10 years.

Some people consider a mortgage a mill wheel around their neck.. I consider it investing money now (not for captial gain before i get shouted down!) but for a cheaper retirement.

As a poster mentioned above, you should only compare interest only versus rent. The extra amount you pay on capital repayment would probably need to be saved / invested to continue paying your rent after to stop work.