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To buy or to rent
moneytracker
Posts: 141 Forumite
Me and my partner are looking to save about 50% of a mortgage and are unsure as to whether we should buy or rent.
If we rent we keep the money and can use the interest to pay the rent and still keep the money in the bank.
If we buy we would only be left with a 50% mortgage and 50% equity in the house, but if house prices go down we could lose that money.
And we were just wondering which choice makes the best financial choice?
Thanks for all your help.
If we rent we keep the money and can use the interest to pay the rent and still keep the money in the bank.
If we buy we would only be left with a 50% mortgage and 50% equity in the house, but if house prices go down we could lose that money.
And we were just wondering which choice makes the best financial choice?
Thanks for all your help.
0
Comments
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I assume you're first time buyers.
What sort of figures are you talking about?0 -
You dont lose that money until you sell again, prices may have continued to go up, or continued to go up. Or may have done both in that time.
Either way you will have a HOME of your OWN!
If you are paying rent with your interest, then the money will devalue due to inflation over time. Plus you will be losing all your interest on rent but not gaining anything that you own.
Some people might wait a bit until prices take a downwards turn - but then again they might not do that for years! It's a gamble. Think about how much the security of a house means to you?0 -
Yes we are first time buyers. We have about £80,000. This would be about the 50% of a mortgage of the size house we need, although some comprimses would have to be made over the house.0
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You dont lose that money until you sell again, prices may have continued to go up, or continued to go up. Or may have done both in that time.
Either way you will have a HOME of your OWN!
If you are paying rent with your interest, then the money will devalue due to inflation over time. Plus you will be losing all your interest on rent but not gaining anything that you own.
Some people might wait a bit until prices take a downwards turn - but then again they might not do that for years! It's a gamble. Think about how much the security of a house means to you?
Theres no security in 'owning' a house that is actually owned by the bank, its all just perceived.0 -
Fair point, but banks are far more secure than landlords in my perception...0
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Some good posts there Meatballs.
There was an interesting articule in last Sunday's Times on the buy v rent decision.
It showed that for the rental option to make sense over a one year period, house prices would need to fall by at least 7% during the same time frame.
I don't know of any pundits predicting such a fall in the short term, indeed according to the same paper house prices in the UK are predicted to rise by at least 4% over the rest of 20070
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