Stay in rented or buy?

cousins82

Hello,

I have a problem that I am not sure which way to go.

My husband is in the forces and we live in married quarters.

We pay £280 per month and this includes council tax, rent and water rates for a large 3 bedroom house.

We both work and have worked out that we can save £1200 per month if we were to stay in our married quarter.

If we were to buy here (in the south) houses are expensive and with a £1000 per month mortgage, would only have £400 per month left over.

We have a joint income of £54000 per year and my husband has another 11 years of service left. Is it best to stay in our married quarter and save every month or to buy a house?

We really cannot figure out which is best financially

[Deleted User]

£280 per month is a tiny sum of money to be paying for your living costs and it is less that you would pay in interest on a mortgage, that means you would be better off £ for £ if you invested your money and remained in your subsidised rented accommodation for as long as possible.

If you save £1200 per month after 5 years you would have ~£90,000 -- assuming you invest the money over the 5 years and get reasonable returns. If you purchased a property with a £200,000 mortgage after 5 years of paying you would have paid £25,000 towards the capital, to compete with the value of your hypothetical investments you would have to see your property gain far above the current house price growth rate.

If your goal is entirely financial: save. Personally I would save... however there's far more to property ownership than just money, a lot of people feel the need to settle down and aren't comfortable renting long term. Do whatever makes you happy

Funky_Monkey7

At your current rent costs, I would say stay where you are and save up until you have a very sizeable deposit. I live in London and have paid over £1,000 a month for a tiny onebed flat. As citricsquid said, your current rent is less than the interest in your mortgage.

ACG

Its very rare i would say this, but i would say carry on renting.

If you do want to buy to hopefully protect you against rising house prices, get a property and rent it out. But you then have the hassle of tenants.

dgtazzman

Don't want to be rude or prying, but you have a joint income of 54k, only pay £280 a month for rent and fixed bills, yet you can only save £1200 a month? Where is the rest going? We have a comparable joint income, fixed bills of around £1200 a month ( true that includes 2 mobile contracts and sky) and manage to save around the same amount per month, so where's the difference going? The calculations just seem to be missing a big chunk, so advice wouldn't be based on the full picture.

At £280 a month for a 3-bed with council tax etc. included, you'd be daft to give that up, save while your OH is in the forces and buy a house with a big chunky deposit you have saved up when he leaves.