Which is better, buying or renting? If you’ve been wondering whether to take the step toward homeownership this year, consider this:
Today’s low mortgage rates are hard to beat. Rates this low dramatically reduce the cost of homeownership. In fact, it’s hard to overstate the importance of today’s low mortgage rates in the decision to buy or rent. Look at a 30-year home loan valued at $250,000. At 8 percent, the mortgage payment would top $1,800 per month. At 4 percent, the monthly principal and interest payment would be less than $1,200 per month. Today’s low mortgage rates are giving families a rare opportunity to lock in low rates — and low monthly payments — that they can enjoy for years and years to come.
You get to build equity. When you pay rent, you are paying your landlord’s mortgage — or adding to his or her bank account. When you’re a homeowner, you can create equity by paying down your mortgage balance over time and by benefiting from any increase in home values.
You get a tax deduction. If you rent, your landlord get the tax deduction. When you own your own home, you get the opportunity to deduct mortgage interest and property taxes.
You get freedom. Your landlord probably has a bunch of different rules that keep you from doing things like painting or other home improvements. When you own your own home, you get to make your own rules!