Are you considering whether to rent or buy a home? Both options have advantages and disadvantages.  You decision will depend on your finances, long-term plans and the housing market.


Savings is key to whether or not you can afford to buy.  Renting is without doubt cheaper and quicker to start but renting costs go up annually and over the long term mortgages come down in costs.  Renting might make saving more difficult although you do not need to take responsibility for repairs and maintenance as those will be the responsibility of the property owner.

Some rental properties include costs of utilities including internet access.  Most leases require a level of notice and you are not guaranteed a long term rental agreement.  A rental agreement will require a deposit, which over time is unlikely to be returned, assuming that you rent the same property longer than you intended.

Buying a house will require a down payment of 20%, although as little as 3% will be acceptable but there will be additional costs for a mortgage insurance policy.  These rates will vary depending on the loan agreement you take up and your personal financial position.

Long Term Plans

Do you want the flexibility of moving around?  Do you plan to have family, get a partner, are you in a relationship, what are your career plans?

You may well find yourself settled in a home and find that the landlord wants to terminate your agreement.  This means that you are not fully in control of your destiny and you may have to move quickly, potentially reducing your options for finding a new rental home as time is against you.

Buying Advantages

Buying a house, over time, build equity and increases your level of ownership in the property, providing you with the opportunity to potentially buy a bigger home in the future.  You are not accountable to anyone, house rules are your rules and do not have to be answerable to a landlord. 

Buying a home provides stability about schooling, you can improve your home to your tastes.

Buying Disadvantages

You need sizable savings to get started, even if you can only afford a small down payment.  The paperwork can be a bit of a minefield and you will need to understand interest rates, APR, mortgage insurance policies and contracts.

Defaulting on mortgage payments could mean losing your home and the possibility of owning another home in the short term.  Home owners are responsible for repair and renovations. Unfortunately some repair demands are not always planned or expected.  The unexpected expenditure could be the difference between meeting mortgage commitments and defaulting.

Renting Advantages

There are few upfront costs, less paperwork, less credit checking and you are not responsible for maintenance and repairs.  Changes in the economy that result in falling home prices do not impact you or worry you.

Renting Disadvantages

Even with a robust rental agreement the rent will go up and could go up above the levels of inflation and any pay rise you receive.  Renters tend to move more often that buyers and renters do not build up equity.

Why You Should Buy

Buying a home can be a good investment.  Look at buying a home as a long term investment.  Even an economic crisis will not last indefinitely so any falls in home prices will eventually be reversed.  Over the last 100 years home prices have increased far greater than inflation.