Whether or not is renting a waste of money, renting provides clear benefits for pockets of the population. Homeownership is a responsibility. It requires maintenance, upgrades, and renovations. Location plays a role in the debate too. Most homes reside outside city limits. Downtown areas house multi-unit properties.
Here we take a look at the debate from a financial perspective.
The average home in Australia sells for $850,000. A 100% mortgage at a 2.19% interest rate over 30 years nets a monthly repayment of $3,223.14. The average rent in Australia hovers around $3,033. When you factor in utilities at $218, the amount to rent or buy is almost the same.
Renting offers more freedom than buying. If you want to move once every five years, you can. You simply don’t renew the lease, and you find a new place to live. The property managers take care of maintenance and other responsibilities.
The difference between renting and buying is that at the end of 30 years, you own your home outright and property values increase & double with time. If you rent for 30 years, you don’t own any property. On paper, homeowners can leverage their home’s equity to build wealth. Renters don’t receive that luxury.
Is Renting a Waste of Money Conclusion
From a paper perspective, it does seem that renting is a waste of money. For those who prefer convenience and less responsibility, renting is ideal. When you’re ready to explore homeownership, Mortgage House provides several financing products and tools, including calculators, such as the mortgage repayment calculator.
