Mortgage cheaper than rent?

Yes mortgage monthly payments are, in most cases, cheaper than rent, and that's for first time buyers. I mean, all you have to do is Google it and there are plenty of reports about it.

We recently sold a house for 140k. With a 10% deposit a 25 year mortgage would be around £700pcm. The house was bought by an investor/BTL. It is currently advertised for rent at £900pcm. No work looks to have been done to it in the few weeks since we sold it.

No idea. I was just answering the question asked by the OP...

The house next door to me is rented out for 3 times what my mortgage is. We have had our mortgage a long time but ds has been looking at buying a flat or small house and renting is way more expensive than buying in and around our area.

Our mortgage is £1650 per month. The exact same size house over the road is rented out at £2300 per month.

It's not even a case of directly comparing mortgage vs rental.

Unless you on an interest only mortgage, the cost of having a mortgage is not what you are actually giving the bank. The cost of a mortgage is the interest part of the loan, not the money which goes towards paying the capital.

So even is someone has a mortgage for the same cost of renting, the person paying the mortgage is still ahead.

It's obviously the case that having a mortgage on a property is cheaper than renting, otherwise the entire rental market would collapse.

the difficulty of mortgages is getting tbe deposit and getting over the psychological ‘investment’ barrier. When you rent you are paying off somebody else’s mortgage. When you have a mortgage the total
amount looks big in paper, but it’s an investment you will get a return on. It’s all about framing.

South Wales town so majority new developments or old terrace housing.
Average price for 3 bed terrace £210k. 100% mortgage would be £1150. Same size house/layout up for rent at £1200pcm.

My mortgage is£895 a month zone 6... 3 bed semi and 2 spaces off street parking
Rents are £1600 in my street

I live in one of those dreadful new builds that MN hates. The mortgage on our 4 bed detached is less than the rent on the very nice 3 bed semis opposite.

To rent our house I think would be c£400 more than our mortgage payment based on the local area.

I’m not sure how you level the playing field as you are trying to do because a lot of homeowners will have put a deposit down which would skew it (25% in our case)

Albeit 15 years ago but I paid £800 a month repayment mortgage for a 2 bed flat in Oxford. Rent at the time would have been £1200. Lived there 5 years then sold for £5k more than we paid.

Saved £400 x 12 x 5 = £24,000 saved. Then some of that £800 paid off the mortgage so 5 years later we had £5k profit from price increase, a bigger equity as we had paid off 25% of mortgage then less the cost of buying and selling.

The interest part of the mortgage is the same as rent e.g. you are renting from the bank. But yes it is usually cheaper!!

It can be true!

You could rent a tiny and very mouldy 3m wide 2 bed house in Cornwall for £1300 PCM.
Or mortgage one on the same street for £220,000. Same size house just further down

Santander say this would cost £1036 pcm with 10% ish deposit

Based on what's available on Rightmove this morning 💐

The buying price is fixed in time and property prices tend to go up. So I would expect that someone who bought 20 years ago with a 30 year mortgage would pay less than someone renting now the prices have increased. With renting, the landlord is responsible for the boiler breaking down, or the driveway needing resurfacing, so needs to charge more than the mortgage. Even if you pay less renting, you don't end up with an asset at the end.

So many people seem to be comparing a current mortgage on a place bought some time ago (with a deposit) with current rents.

Yes my home is worth about £1200pcm on the rental market and we pay £540pcm in mortgage

My DS was paying £1900 pcm rent for a two bed flat in SE London. He's just bought a house and is now paying £1750pcm fixed for a few years. So true for him at the mo
But how much does he pays in maintenance, upgrade, repairs etc... I bet much more on average than £150 a month!

We live in SE London. Rent on our property would be +£300 more per month than our current mortgage on it.

True for me, I have owned my house for 7 years, bought with a 15% deposit, and currently my mortgage monthly payments are approximately 40% below what it would rent for.

I just ran the stats through a mortgage repayment calculator to see how it would look if I bought it today and the mortgage payments would be cheaper than renting with 15% deposit, 10% deposit or 5% deposit.

If you are just talking about cost of mortgage compared to cost of rent, the former is usually a smaller figure per month. But if you buy, maintenance costs should also be considered as part of the ongoing cost. If you factor in everything you pay out to maintain a property over time, it may be cheaper to rent. A homeowner has to pay for everything: a plumber to sort out a burst pipe, repairing the roof, replacing a dead washing machine, mending the fence etc. Assuming you have a halfway decent landlord, and these things get dealt with properly, it may be cheaper, and it’s certainly less stressful, to rent. If you put a monetary value on the time you take to sort out maintenance issues as well, renting is definitely cheaper.

And there’s always the risk that if you want to move for a new job, selling a house can be a slow and expensive process - think bridging loan, or renting in a new place while you wait to sell, the basic costs of marketing and selling a house, or perhaps even having to turn down a job because you can’t afford to move. If you rent, you just give notice and go.

Our neighbour rents their 3 bed, 1400 a month. Our mortgage is £659.00.

It’s true for us. Our mortgage is £982 per month. Rental value of our house is £1400 per month.

Whether it's more expensive or not depends on interest rates, what you buy vs what you used to rent, how big your deposit was and how long your term is. However, for most people when they get a mortgage they are repaying the capital alongside paying the interest so although you don't have that money any more to spend, you do still have some of it, in equity in your home. So to compare like for like, you need to compare the interest portion of your mortgage, with the rent you used to pay.

If you think bout the economics of it - if rents didn't cover at least the interest portion of a the LL's mortgage, then they wouldn't hang on to the property for very long, They'd sell (it's be a bad investment) and there would be fewer flat's to rent. Rents would rise to make rentals a viable options for LLs again.

My mortgage is £385, rent would be £600-700 ish and that’s being on the low side