Mortgage cheaper than rent?

3 bed semi detached in my area (north west) roughly £900 a month. My house 4 bed detached mortgage £567 per month. Also no risk of me being kicked out.

in the majority of places rent is a lot more than a mortgage

Mine is! I pay £400 mortgage, and if I rented my own house it would be £3500

Its always goimg to depend how much equity you have.

If you have 50% equity (or even 25%) then yes your mortgage is going to be less than rent.

If you have 5 or 10%, it may not be.

It also depends when you bought the property. If you bought it 10 years ago for 350k with a 50k deposit, your mortgage is only paying for 300k worth of property value. If a similar property now costs 500k, you are likely to have to pay more in rent to a landlord, who might have a 450k mortgage the rent is covering plus needs to take in enough to cover the tax they pay, costs of repairs/maintenance, letting agents, void periods etc.

I think it’s down to many variables.

My age and area I live in - if I was to buy my house now even with the deposit I initially put down renting it would be cheaper (just)

But because I have lived in it 16 years and paid a chunk back, my mortgage is cheaper.

It’s why we haven’t moved, as the costs/mortgage etc has meant it just makes sense for us to stay put.

We bought in the boom of 2007, lost 120k in equity overnight in 2008. The property value is not quite back to where it was now but almost. We obviously now have paid off enough of the mortgage that we do have equity in the home.

Our mortgage is £780 p/m, which is more than most of our neighbours.

For quite a shit estate a mile down the road for a smaller house and really not pleasant neighbours its £900 p/m

Not many rentals come up in our area but they are over £1200.

If the landlord has a mortgage for their rental, they have to charge a minimum of 120% of their mortgage usual, it's the mortgage companies who usually set that..I could only see rent being cheaper than mortgage if they landlord doesn't have a mortgage

Yes but with rent he paid no insurance or repair bills e.g. last year on our small rental as landlords we had to pay for a new boiler and washing machine. Also various repairs as needed on the shower and bathroom.

Which means his £100K deposit is now tied up in property. If he was renting it could be in a high interest ISA getting around 4% interest a year (£4K), plus he now has to pay all maintenance costs on the bought property. Good for him in the long run, but in the short term owning will cost him more than renting.

I don't "have to" do anything. Surely you realise that everyone's circumstances will be different?

My brother is a landlord of a rental property in London. He has an interest only mortgage. The rent is higher than the mortgage but after fees and all the other costs he just about breaks even.

My house would cost about £3.5-4k to rent. We pay £1k mortgage but had a good deposit. If we were to have taken out a 90% mortgage the repayments would be £3k so still cheaper for mortgage than rent.

only if you don't calculate upkeep/repairs/mortgage fees/insurance

Fairly obviously, if it wasn't the case that mortgages are cheaper than renting for an equivalent property, the entire concept of landlords would not be viable.

My mortgage is considerably cheaper than it would cost to rent my property. Interest rates would need to hit about 15% (and rents remain exactly as they are now) before that changed.

Landlords would all go bust if rents were lower than their mortgage payments.

I suppose if you're a first time buyer with a small deposit, and live in a reasonably low rent area then the opposite night be true. But after a few years, if you fix, you'd still probably find rents begining to outpace your mortgage costs.

Mortgage on my 3 bed house is £690 pm. My exH pays £950 for a 2 bed flat in the same area. So YABU.

Yes it can be! Mine was when I first bought. Though you may not get the same quality or area for the same/less amount.

Mortgages are definitly cheaper than rent where I am (Greater London) - maybe not of you have a 100% mortgage but not sure if you can still get those.

It is substantially more to rent here - I mean eye wateringly different. A 4 bed house to rent here is £3000+ pcm. My mortgage is £1500 pcm. If I was buying the house now it might be comparable I guess but Im not sure I know many people paying 3K a month mortgage.

It was in my case, not sure how common this is! Our rent was £1000 per month, our mortgage is currently £850pm. This was with a 10% deposit we managed to save whilst renting. Rented property was a two bed maisonette, current house is a 3 bed semi.

We rent our London flat out for £2,200 p/m (1.5 beds, zone 2, SW London).

Our mortgage is £3,400 p/m (4 bed, Surrey).

And sure you'd be thinking "yes but one of those properties is twice the size" but they are the exact same market value (£800,000). We bought in 2022, with a deposit of £160k.

I own a 2 bed house with a garden and my mortgage is less than the rent on the flat attached next door to my house.

Obviously it all depends on how expensive the house was to buy, how much deposit was put down, how many years the mortgage is spread over, what the interest rate is and so on.

200k, bought for 103k 11 years ago

Ours is the same, but for a much nicer property.

Our mortgage is £1600 pcm for a 5 bedroom house with smallholding, 5 acres, 4 barns, huge mature garden. We paid £850k.

The house we rented 4 years ago before we bought was 3/4 bedrooms with no garden and no outbuildings or land. We paid £1200 a month, but it went up to £1600 for the next tenants when we moved out. I don’t know what a property like that would sell for as was a cottage on the grounds of a larger property, but probably £400-500k. I see loads of properties for rent around here for £1500-2500 that are not as nice as ours.

That said, we rented and saved for a long time, which is why we were able to buy such a nice house with a big deposit.