Mortgage or rent – ​​which is more profitable?

Probably every person, when analyzing the issue of housing, is faced with the most important question - to take out a mortgage and assume the obligation to pay or rent a home - and be able to move at any time. What is more profitable, cheaper and more convenient? Below we will try to understand the pros and cons of each option.

About quality of life

So, apartments and houses in most cases are rented by individuals for a certain period, but this does not mean that tenants receive any guarantees that in a month the landlords will not want to sell the property, move in relatives there, or simply lock it up. Thus, the impossibility of long-term planning is one of the decisive arguments in favor of a mortgage, as it is directly related to quality of life and stability.

At the same time, tenants understand that if there are no guarantees, there is a possibility that they will have to move out, and therefore, they do not invest in repairs or rearrangements, good appliances or furniture - which is why most rental apartments hide a whole list of “jambs”.

About finances

Now, thanks to online calculators, you can easily calculate what the difference in payments between a mortgage and rent will be. Let's take 2 similar apartments as an example - renting a two-room apartment in the city center starts from 600 euros/month, while when purchasing a similar apartment with a mortgage, payments will start from 800 euros/month. Thus, after 10-25 years, when the mortgage is paid in full, the property becomes property, and this implies one of the most stable investments.

About the pros and cons of renting

+ If there are no savings for a down payment, smaller monthly payments will allow you to save part of your income into a separate account.

+ Mobility – the ability to quickly move without any obligations and problems with repairs and arrangement.

+ A large number of offers on the market in any convenient area close to public transport, places of work, parks, and other points.

+ Payment delays agreed with the landlord.

- Unexpected price increase and no guarantees.

- The landlord’s conditions - starting from the rules of residence, a ban on making changes to the interior, replacing furniture and equipment, and ending with “inspections” or a requirement to move out.

- Deception on the part of landlords, financial fraud, renting out an apartment to more people at the same time, inconsistency of condition and hidden problems or unwillingness to draw up a contract.

- Lack of investment - saved money can be depreciated by inflation.

 About the pros and cons of a mortgage

+ Quick purchase and move into your own home, without the need to save a large amount and calculate payments, which allows you to better manage your finances.

+ Win-win investment - every year the cost of housing increases in price, and upon subsequent sale the amount received will be greater than the purchase amount. Moreover, investing in real estate is a hedge against inflation, as the money goes towards paying for your own home.

+ Independence - from the first day of purchasing a home with a mortgage, you can equip it as you wish, change furniture, appliances and design in general.

+ A small difference in the monthly payment compared to renting, given that in this case you are paying for your own housing. Moreover, housing can pay for itself when rented out.

+ A huge number of advertisements from professional and reliable realtors and agencies that accompany you at all stages of the purchase, while providing legal advice, as well as government assistance programs for certain categories of citizens, for example the “Prima Casă” program.

- The need for a minimum down payment of 20%.

- Floating DAE which can decrease or increase depending on the economic situation in the country.

- Binding to a specific location, therefore, when choosing, it is necessary to take into account all aspects - transport and social infrastructure, traffic jams, the possibility of new buildings or other buildings around, the availability of parking spaces, as well as the quality of the building materials used and the work performed.

- Financial discipline - each day of late payment carries with it penalties, without the possibility of deferment.

Conclusion

There is no definite correct answer to this question, therefore, based on the presented pros and cons, the choice of each person is individual. Check out the huge selection of apartments available for rent and sale by following the linkhttps://casahub.md/toate-anunt...