Nearly 40 with no pension or mortgage

bigmaz

Well, It’s slightly cheaper, but if the interest rates go up, then I’m screwed.

Terron

DevilsAdvocate1 wrote: »

I've noticed that it can be cheaper to have a mortgage rather than rent. I guess this is because a landlord has to pay the mortgage and make a profit. Obviously there is the problem of a deposit, but I wouldn't discount buying somewhere to live.

Mortgages ought to be lower than rents, as the mortgage is not the only cost that the landlord pays that a home owner would also have to pay, especially for a flat were besides repairs there would also be ground rent and a service charge.

scaredofdebt

You need to start budgeting would be my #1 advice, then you can see how much you can save.

bigmaz

Terron wrote: »

Mortgages ought to be lower than rents, as the mortgage is not the only cost that the landlord pays that a home owner would also have to pay, especially for a flat were besides repairs there would also be ground rent and a service charge.

My rent is £635 per month, the flat is worth around £160,000, if I managed to get a 90% mortgage, that would be roughly £600/m, so not that much cheaper and if the mortgage rate go's up, i'd be struggling. Also, as you pointed out, i'd be responsible for those other things you mention.

cloud_dog

DevilsAdvocate1 wrote: »

I've noticed that it can be cheaper to have a mortgage rather than rent. I guess this is because a landlord has to pay the mortgage and make a profit. Obviously there is the problem of a deposit, but I wouldn't discount buying somewhere to live.

You need to remember that we have been / are in an extended period of extremely low interest rates (due to the financial meltdown 2008 and QE). Current interest rates are not the norm, and I don't think they will become the new norm either.

We have also been in a period over the last 15 to 20 years where buying rental properties was very attractive and perhaps more restrictive in new housing developments, and all of this has led to a supply shortfall or higher demand for properties; higher prices for buying, higher prices for renting. The lower cost for borrowing is as a result of the extended and abnormally low interest rate environment we are still in.