Mortgage cheaper than rent?

Around £80k, I think, give or take. But of course you get a big discount for buying your council home from the council. I think I could buy mine for about £30k now because I've been here for so long.

i know I couldn’t afford to rent my home. But it’s worth including the additional costs of owning a property to make a true comparison rather than just the monthly repayment.

In the last 2 years our house has cost us around 10,000 just in essential maintenance.

Obviously we benefit from this in the longer term but it certainly clouds the picture a bit

That makes the value of the flat around 45k?

You are giving up the interest on the deposit though, which basically means the mortgage cost is the same.

I'll make it interest only without conpounding for clarity

Imagine a 100k house.

You borrow 90k @ 5% = 4500 pa = 375 a month

You give up 5% interest on your 10k deposit = 500 pa = 41.6 a month

Total monthly cost = 416.6

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You borrow 100k @ 5% = 5000 pa = 416.6 a month

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You borrow 50k @ 5% = 2500 pa = 208.3 a month

You give up 5% interest on your 50k deposit = 2500 pa = 208.3 a month

Total monthly cost = 416.6 a month

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In reality the mortgage interest and the deposit interest probably won't be the same (unless it's an offset) so there will be advantages or disadvantages to using money for a smaller or larger deposit, choice of investment product and so on, but the general principle applies - the money you "save" by putting down a deposit is broadly offset by the investment income you lose.

300k. So in theory I guess I'm spending about the expected amount a year.

I think it was just 5 years after I bought mine that the landlady bought this house.

I live in a council flat. My rent is £450pm. If I bought it, my mortgage would be around £200pm.

My NDNs are renting privately from my ex-neighbour who bought his flat outright 15 years ago for £18k. They're paying £700pm.

Yes, I think that may make a difference; I bought my house in 2008 and it's nearly paid off.

A landlord might "lose" money month by month but retains a capital asset which may be appreciating.
So it is not as simple as mortgage 500, rent 500 plus maintenance 100 = a "loss".
Since capital equity likely to be there so landlord may sell up and make 250k or whatever.

Well I'm glad you're not denying the reality of house buying in the UK.

The average buyer puts down 15 to 20% deposit when they purchase.

That mean most mortgages will be influenced by the deposit - that's reality.

Hence mortgages are cheaper than rent for many.

It’s area dependent isn’t it? We live in a fairly expensive bit of south east. Rent is far more expensive than mortgage here. We rented for years (couldn’t get a mortgage) when we were finally able to buy mortgage was much cheaper (even taking deposit into account.). My brother lives in north east, renting is cheaper where he is.

Landlord would probably lose money initially per month if on repayment mortgage rather than interest only around here, once taxes etc taken into account but would eventually profit further down the line or make money once house prices and rent value rise, if interest only would break even or make a small profit initially. But like any business you have to be in it for the long haul, it's a long term investment, like buying stocks and shares, you may make an initial loss but if you invest for the next 20 years you'll make a profit
First time buyer in my area with 10% deposit and 25 year term monthly payments on repayment mortgage is basically the same only 35 year term it would be cheaper per month from the get go

I'm currently living next door to my house whilst work is being done. The house is exactly the same as mine. The rent is well over double my mortgage.

Average upkeep costs are around 1-3% of the house value.
How much is your property worth?

OK, but you keep posting things which don't also add up in the real world?

You can't deny people's lived experiences @limeandwater , or the sums which show that their mortgage is cheaper than rent.

Seems a strange hill to want to die on conversationally.

I think this really depends where you are. My sister recently managed to get a first mortgage with a 10% deposit. Her mortgage is £700 per month for a small terraced house. She was paying over £1000 a month in rent for a 2 bed flat in the same area so yes it was cheaper to buy and have a mortgage. I've always been of the belief that renting is more expensive. But perhaps not always.

To be fair on @limeandwater there was a time about 20 years ago where it was cheaper renting where I lived rather buying - maybe something to do with the housing crash - as we were thinking of buying but decided not to. We bought our first house in 2013 when it had definitely flipped back to a mortgage being cheaper than renting.

Why does any of this matter to you OP? People are telling you over and over that their mortgage is lower than their rent previously was and you don’t want to believe it. Maybe you should just scuttle off now and be offended somewhere else 🤷‍♀️

I suspect there is VERY little in it. I pay around £5-10k a year for upkeep of a 1960s house, which is endlessly falling apart in terms of damp proofing, roofing, pipes, etc.

The other issue is that my DC are renting flats in London that have a market value of several million - house shares, admittedly, but if they didn't rent they would never be able to enjoy living where they do!