Mortgage cheaper than rent?

It is a perfectly sustainable business model.

Many businesses - and all asset heavy businesses - require substantial initial investment. It would not argued that building planes or launching new drugs is unsustainable because of early funding requirements. Property management is no different.

And property price crashes are an issue only if the landlord needs to sell at a low point in the market. Landlords with multiple properties may exploit market crashes to grow their portfolio.

Running a successful property letting business has to be a long term investment.

If you are looking for a meaningful comparison, you need to compare the amount of interest you pay (the capital repayment is not strictly a cost of buying) versus the rent.

The average rental yields used to be around 5%. Now with interest rates tending to be close or even higher with booking fees, many landlords are finding that they can make better returns elsewhere and are getting out.

Of course if you only have a mortgage for 50% of your home or bought such a long time ago that your mortgage now only reflects a small part of the overall value, it will be much er cheaper than buying the same now at current value with a high loan to value.

It's about the same where I live, for a 90% mortgage vs rent. It used to be that a mortgage was cheaper, but rates are higher now. If you've a lot of equity, then obviously mortgage will be a lot cheaper. But there are additional costs to owning a home as well.

Id imagine if you were able to get 100% mortgages then in most areas a mortgage would be more expensive than renting if you base it off the value today, however as time goes on rent increases and mortgages either stay the same or occasionally go up or down a little with interest rate changes but it most cases it doesn't go up anywhere near rental increases and the mortgage would eventually be cheaper than rent and then at some point it would be paid off. Not quite sure of the point you are trying to make

My DB pays almost double in rent to what we pay in mortgage payments. Same area but he does have an extra bedroom.

Flat in village near me sold for £48k so mortgage approx £225 a month, it is currently for rent at £650pcm.

No. The point is that rents and house values go up over time (on average) but mortgages don't track either of these increases and only, potentially, go up with variable interest rates and do eventually go down (assuming you are paying off the equity).
You say that the portion of a home purchased with a deposit needs to be discounted because otherwise it isn't a fair comparison. It would also be an unfair comparison if you ignored the very different trajectories of the two options you are comparing.

Right now my mortgage at £1,300 is less than what my home will rent for (£1800 judging by the recent requested rents on my road for identical homes) but when I remortgage next year i'll probably pay slightly more than what it would rent for.

This is certainly the case in London, however, it wasn’t such a big issue before the mortgage rate increases. For example, our mortgage for our two bedroom flat was £1600 a month, rent is around £1900 a month for the same property in our area. But now with the mortgage rate increases, our mortgage is £2100 a month. 😣

That would be true in my town we currently pay £1100 mortgage but would be between £1200-£1400 for a similar semi detached house in our town depending on the area to rent it
looking online only a flat or house share would be cheaper than £1000 per month to be honest

Think its totally dependent on circumstances.

We're halfway through our mortgage and its only around 450 a month (though may increase in 2027) to rent a similar property is around £1200 a month currently in our area.

Though there's also the added costs of home ownership for upgrades and repairs eg we've paid out thousands over the years for new boiler, flooring etc which likely would be covered in a rental. I do sometimes wish I rented because the weight of making all the decisions gets heavy at times!!

Yes definitely. I have a mortgage on a 2 bed terrace in the north that is £350 & is mortgage will be paid in 5 yrs. House next door £600 pcm rent. A friend in her late 20's has just got her first mortgage literally 2 streets away from her previous rental & pays £100 less. Another friends mortgage is also significantly less than it would cost her to rent the same house & its value has gone up by a third in 5 yrs.

If you rent, you will be paying the market value for the entire length of your tenancy.
With a mortgage, although your initial payments may be high these will remain fairly stable for the extent of the mortgage (interest rate changes accepted) but will as time goes on will increasingly take a smaller proportion of your salary.

When I was a FTB, my mortgage was huge but by the time I paid it off (early) it was one of my smallest bills.

It really, really isn't.

A cursory bit of research will tell you that. If you are actually a landlord, I suggest you find yourself another occupation.

Currently true where I am. Mortgage on my two bed flat is £1450 a month. Quick look at similar properties in the area and rent is £1850. Obviously I have other costs as a home owner but I so far have around £70k equity in my flat whereas I’d have nothing of renting.

By doing this you erase the main point of buying a house which is to gradually build up equity which allows you if you wish to move to a bigger / nicer house.

Your premise seems to boil down to everyone is a FTB with no savings forever. That isn't the case for everyone and people in that position almost always have changes that they can make to change their situation.

Where I live, a 1 bed flat with a garden would cost me around £1500 per month. My mortgage for the same is £1050.

In my experience it is always true. Added to which it's a huge investment, and you get to own something at the end!

The edit button is gone but just wanted to clarify I meant £100 a month every year. So in year five rent may be 1500 a month where the mortgage is still 1000

Your original point was that in general it's cheaper to rent.

Which it isn't.

You sound really naive with regard to renting. Being a landlord isnt a charity and this stupid Labour government is about to make it much worse being a landlord.

There will be far less properties available with the new rules coming in and guess what - the prices will go up. Of course the lefties will pat themselves on the back that the laws have changed and skewered massively towards the tenants.

I am not a landlord and wouldnt want to be one. I have colleagues and friends who have been and they all say never again.

The place my son is renting is about the same as a mortgage repayments (assuming a 15% deposit - which would tie up £35K) and no maintenance. At his life stage (21) definitely think renting is better for the freedom to move and probably financially better too in the short term. His investments have been growing at faster rate than house prices…up until recently.

Obviously, it you have loads of equity then the mortgage payment will be lower than rent but if you’ve only got 15% or less equity…