Mortgage cheaper than rent?

[limeandwater]

On this forum and plenty of other social media sites to be fair - there are a number of people who state that a mortgage is often cheaper than the rent.

It's not true is it? In fact it is quite a long way from being true.

I would say that in a lot of areas it is true. Where we live my DC would pay less in a mortgage even with a 95% mortgage than anywhere they could rent.

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

In the same area?

Well the majority of the time it is, yes. My house would be £1000 to rent in my area. My mortgage has just been fixed to £390 for the next two years.

Yes.

Can you give a reason or expand on why you are saying it is not true?

I would love to know the figures for that.

Not because I don't believe you, it just isn't my experience.

My next door neighbour rents his home frim the owner. I know the owner aa was my neighbour and friend, so know exactly what the mortgage and rent is.
The Tennant is paying way more in rent than the owners mortgage is and more than my mortgage.
That rental fee will increase each year, orher than rates, the mortgage won't.

It isn't my experience in the slightest.

Mortgage, usually yes. But people don't count the overal costs of owning property.

I'm sure I overheard my parents discussing whether to buy their house some years ago and they did say that rent was (back then no idea about now) about the same price as the mortgage

Plus with a mortgage it will end one day, and the mortgage payments will be zero. Rent is for life.

He had a big deposit saved which obviously affected how much he needed to borrow.

I think it is if you took out the mortgage a decade ago or more. New mortgages, no way.

well in most cases rent will be fairly significantly more than the landlords mortgage otherwise they would be making a loss in renting out the house and so wouldn't bother. The landlord has to pay tax on the rental income so generally rent will be at least the mortgage plus the tax and agents fees

I mean that isn't a fair comparison then is it.

Absolutely, obviously buying is better.

I think people forget to factor in the deposit when making this comparison. Obviously if you have a decent amount of equity then the mortgage will be cheaper. For a meaningful comparison you'd have to work out what a (theoretical) 100% mortgage would cost.

Sadly it doesn't work like that.

Exactly.

When I bought my first flat with my husband, our payment for housing almost halved and that was room in a flat in SE London to half a one bed flat in East London. My mortgage payment is now closer to rent but only because the rate jumped.

mortages have always been cheaper in these parts, though of course there are other costs associated with being a home owner. Even if it was initially more expensive, over time your earnings usually increase and mortgage payments usually make up a smaller proportion of your housing costs, whereas a landlord will always set rent at market rate.

It certainly is around here, houses like my previous house (exactly the same, on the same street) are £1,100-1,300 pcm. Our mortgage was £500 pcm.

Nah that's patently not true either @Whammyammy

My parents rented throughout their late 20s until my father retired two years ago. For flexibility but also initially because he had bad credit.

However they saved and invested using basic FTSE trackers, and over time this investment increased as his income rose.

So they bought outright in the end, in their 60s, three bedrooms in a Sunday Times "best places" area... having been told forever by people like you that "Rent is for life".

There's more to life and investments than "bricks and mortar" which seems to be the only message anyone understands on here.

🤔🙄

My neighbour pays £1200 pcm to rent whereas I pay £331 for mortgage. Not sure why you are asking as it’s always been the case that renting is higher