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.

It just totally depends on area, interest rate, size of deposit etc - way too many variables to say definitively one way or the other. It is true that rising interest rates and years of house price increases plus maintenance on top means those with smaller deposits or in expensive areas may be better off renting and investing their money rather than tying up in property (which is a bit of a cultural / mindset shift than the buy-at-all-costs mentality we have in the UK)

Whoops, sorry....bit missed off....

Everyone: Still not cheaper
OP: I can't explain again what I mean.

A BTL mortgage is much more expensive than a homeowner mortgage so if you are comparing those with costs of rental the answer may well differ.

that you can rent out a house for more than the mortgage costs

REALLY need the laugh emoji back

Oh come on, you are being purposefully obtuse.

By all means disagree with me, that's fine.

But we we had posters saying their mortgage was much cheaper than rent so I must be wrong - but leaving out the fact they purchased 30% of the property outright.

You can yes, of course you can.

But not always.

Of course it's 'a fair comparison's' it's the only comparison you can do. It's a 'generally' thing not an in each scenario thing.

6 identical house here, 4 rented, 2 owner occupied. Renters are paying 2x my mortgage. Other owner paid her mortgage off.

it only matters in your own individual situation, but yes, mortgages are usually much cheaper than rent as rent covers a lot more than just a mortgage payment. Are their monthly outgoings in their house more than mine, probably not much. But I have security they don't have & my asset is increasing.

I think it depends when and where you buy. My mortgage is £600 because I bought the place 18 years ago. To buy it now at the market rate (assuming a 10% deposit) mortgage would be around £1400 a month which is exactly what the flats rent for. Or if you've got higher deposit or equity moving from another property then a mortgage would definitely be cheaper.

When people are answering your question they are saying that it's more affordable monthly to own and pay a mortgage than to rent. Ie. It is usually cheaper monthly to be paying a mortgage than to pay rent on a similar property. So for an average person monthly outgoings on accomodation will be less for a mortgage than renting.

Long term whether something is cheaper than something else is almost impossible to calculate surely as depends on how much deposit was paid, mortgage rates, the term of the mortgage and how much the house prices rise over the years etc.

We pay around £1.2k on our mortgage for a house that is worth around £800k (purchase cost 13 years ago + extension costs = 600k).

The rental value would be £3k+ per month.

So yes the mortgage is way cheaper than renting this property would be.

Plus we end up with a big asset.

Yes. My house would be 1800 a month to rent. I know because I looked into it recently. My mortgage has never been more than 500.

Surely it depends where you live.

Houses on my terrace street are about £110k but rents are in excess of £850. One house has been split in 2 and is advertised at a combine £1600. So a mortgage would be cheaper.

My mortgage is £600 a month, to rent out property would cost us £1500 a month…that extra £900 is a lot of find each month.

What is the purpose of this thread?

Is it that you think tenants are clearly so financially deprived that they couldn't possibly pay higher rent than they'd pay on a mortgage?

No.

You haven't answered anyone's questions, even when comparing mortgage and rental cost at 100% house value you seem to ignore anything long term. Or that if you were on interest only mortgage and rented out the house you would also likely make a profit. I'm not anti landlord at all, but if you would always pay out more on a mortgage than you would make in rental payments in the long term, no one would ever become a landlord. You just sometimes have to accept you won't make an instant profit which is similar to a lot of start up businesses

Obviously rent will always be higher. Landlords if they have a mortgage on the house have to pay it out of that rent as well as maintenance. With a mortgage you will eventually own your house and hopefully won’t have to worry making payments to keep a roof over your head once you retire.

You still haven't answered my question.

Look up house/flat prices in the more deprived areas of Scotland and you'll find loads of properties less than £100K, our local Housing Associations are charging around £500 per month rent for the smallest properties.

Even if you don't quite find it cheaper to buy now, give it 10 years of consistent rent increases and you'll be quids in.

Apologies, what was it?

Well I guess it depends on many factors, but for us no. We were paying £1400 rent on a two bed bungalow and bought in December a two bed bungalow and mortgage is £2300.

Why are you wasting everyone's time?

wish I hadn't bothered with my post now as you're not interested in a genuine conversation or looking to learn anything.

you'll be sending virtual business cards next

Which is completely irrelevant. HTH.

I don't think that's fair.