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 mean it depends on equity, size and location. Our mortgage is about half the value of our house, costs around £2,600 pcm. Renting the same house would probably cost about the same. But if we had a larger mortgage it would cost more to own it. And that’s if you’re just talking about the monthly rent/mortgage costs not including repairs, wear and tear, de/appreciation and asset pots.

True in our case even with only 5% deposit.
One factor is rent often increases by £100+ a year
In year one of owning our mortgage was about the same as our old rent
In year 5 our rent would be around £500 more whereas our mortgage will be the same as we fixed for 5 years.
Mind you when our fix is up it may go up but it may also go down.

Just checked rental prices near me and purchase prices. Identical 3 bedroom properties on the same street. Rent £895, purchase price £140,000. Got an estimate of mortgage payments of £700-£770 for a 100% mortgage so yes its true at current prices for property near me.

Of course it's not sustainable.

Just that a loss can be ok.

So, again, not the norm.

What was your point again, exactly?

I feel like I can't say it again, but I will.

That it's okay some years to make a loss.

My mortgage is €1300. The people living next door to me rent for €3000. Identical house but mine has been renovated so would fetch even more rent.

I have just bought a house last year. Rent was £925 a month, mortgage is now £1850. So in my experience no it isn't cheaper. I think those with small mortgages had large deposits or bought a house many years ago.
Lots of variables though.

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…

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.

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

Which it isn't.

The RRB actually changes very little.

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

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

In most cases it is, but hey ho.

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

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.

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.

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.

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.

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.

My accounts are fine, but thanks for caring.

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!!

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

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. 😣