Mortgage cheaper than rent?

As a long term investment mortgage is cheaper. Rent the money is gone. Mortgage will be paid in full after 25 years and you’ll have a whole house to show for it.

So despite pretty much everyone saying mortgage is cheaper than rent, you're just going to dig your heels in & keep repeating your incorrect view.

right.

🤣🤣🤣🙇🏻‍♀️🙇🏻‍♀️🙇🏻‍♀️

I can compare like for like as we bought a few months ago and were renting before then. Our mortgage is the same as our rent was because we took it over a shorter term, so our monthly outgoings remain the same. However, the feeling of security and stability (e.g. we were served a section 21 in a previous house) is invaluable, and we have already made a small dent in the capital we borrowed, which is nice to see month by month. When renting the money is just wasted, whereas at least with a mortgage it’s an investment for your future.

But how much equity do you have in your home? If you bought it at today’s prices with a 10% deposit, would the mortgage still be cheaper?

Even if you ignore the initial deposit (and assuming you don't remortgage) then mortgage payments will always be linked to the amount you borrowed when you bought the property. Yes, interest rates can go up or down, but that is always applied to what you paid for the property (or the outstanding mortgage value, which will typically be lower).

On the other hand, unless you have a very generous landlord, rents will usually be linked to the current value of the property, reflecting the fact that landlords need a minimum return on the value of their asset.

So even if a mortgage costs more than rent on the day you buy the property (and I'm not sure it always does), within a few years that rent could be materially higher while the mortgage payment is more likely to be unchanged.

@limeandwater are you trying to only compare immediatel monthly cost and ignore future changes?
Also are you trying to compare first time buyer with a small deposit vs rent or are you trying to compare landlords cost vs rental income if they bought today?
It's very unclear

Yes in my case, and has been for a while when others told me what their mortgage payments were

I’m I think you’ve just proven the point though? Because your parents didn’t rent for life - they bought in the end. So whether they front-loaded that investment by taking on a mortgage or waited to be cash buyers the end result is the same: a mortgage-free house.

Our mortgage is definitely cheaper than what we were paying on rent. ETA: we're about ten years in on ours. We got the mortgage just before things went crazy.

I live in Brighton, the rents are eye watering. I know for a fact my mums mortgage is less than what the renters are paying next door to her, no idea about her deposit etc though. Surely if a mortgage was higher than rents all round there wouldn’t be many landlords, unless they were mortgage free?

It can be but often a sizeable deposit is needed so you aren’t borrowing the full amount. Also with a rental you aren’t not responsible for some things eg buildings insurance, repairs eg boiler etc when you own you need to be saving to cover said things

Can we stop comparing the rent today with the mortgage you took out 20yr ago.

Yep it's accurate for my area in North East Scotland.
Mortgage rates per month on a 3 bed house between £750-£1000 depending on equity. Rent on a 3 bed house start at £1300 per month.

Flats are even more obvious can buy a flat in Aberdeen (not quite my area but closest city) for around 50-80k now. Rents start at £550.

When we bought our house we paid £50 more then when we were renting but went from a 1 bedroom flat to multi bedroom house.

🤞🏼🤞🏼I hope it all goes through soon & you can enjoy the summer in YOUR new home 🏡 💕

It’s 💯true where I live.

our mortgage on a large semi detached 4 bed house is £800, I recently had it valued and was told if we rented it we could charge £2000 + per month.

Rental prices when I live in the southeast are insane unfortunately

YABU. We have a 4 bed and our mortgage is £1200 a month. On our estate, we regularly see two beds being advertised for rent at £1500pcm!!! 😮 😮 Most don’t even have parking and the gardens are the size of postage stamps.

But why do you think renting (long term) is ever cheaper than owning over the same period?
At the end of 30 yrs of mortgage payment a person has an asset to sell potentially one that has gone up in value. A renter has nothing.

Yes generally.. of not at forst, definitely further down the line. A house up the road exactly the same as mine (fairly new build so no changes etc) is over twice in rent what my mortgage is. Houses round here all rent really quickly so not overpriced

It dependd o n your deposit. A 2 bed terrace in our area sells for 250 rents for 1200.
If you are buying with a 10% deposit you will be similar or slightly higher. If you can stretch to a 20% deposit you will be a bit cheaper.

DS pays £1100 pcm for his 1 bed furnished flat. A flat is for sale in the same block and a mortgage on that with a 10% deposit would be about £800 pcm. BUT the rent includes service charge (£2000 per year) whereas DS would have to pay that on top if he bought. Then of course if anything goes wrong (new boiler needed for example) the landlord pays whilst he's renting

I did suggest to him he looked into buying, and that we could help him with the deposit, but he said he really wasn't sure where he wants to live long-term and likes the flexibility of renting. I can see his point.

It's not just about the headline rent Vs mortgage figure.

It's not entirely clear if op is trying to compare first time buyer vs renting or buy to let landlord vs rental income.
With the first time buyer situation is pretty much the case it'll be roughly similar to buy with 10% deposit when comparing monthly payments initially, then overtime they will pay far less per month as rents go up and their mortgage largely stays the same, it may go up or down a little but over the long term it's cheaper
With landlords they may have a few years of not earning as much monthly as the property is costing them but in the long term as rents go up, then eventually there will be a profit but it may take a few years

My son and gf pay £1,000 + rent for 2 bed flat. They could have a mortgage for £600 on a 2 bed house so they are moving back with me to save.