Let's just assume you pay $1,600 plus utilities to rent a home. Although you have no maintenance expenses, you have no access to the potential that home has to appreciate in value over the years. You can make a good argument for either renting or owning if this is the only variable that you consider. I would be on the side that a properly maintained home will appreciate more than the cost of maintenance in the long run in a good market. But aside from that, here is the real tie breaker....
Take a $300,000 home purchase. With a 5% down payment initial investment at today's 5 year fixed rates of 2.59%, you will have an estimated mortgage and property tax payment of $1,562/month. Take into account an increased cost of home insurance and you will have a total payment in the range of $1,670/month.
5 years go by in a flash. In just 5 years, you will pay down your mortgage by $45,000. That's $45,000 that you put into your net worth. Your mortgage is at $252,000 in just 5 short years.
Now that you know you can put $45,000 in your pocket, pay special attention to the cheque that you write to your landlord each month.
Everyone has a unique set of circumstances. Set up meeting with a mortgage expert so that you can put a plan in place that will put you in a home in the shortest possible time.
My doors are alway open to get you on your way!
Scott Tremblay - Mortgage Broker
iSask Mortgage Brokers