Should I Buy or Rent?

February 18, 2021

Your monthly payment builds equity, or ownership, of the actual physical property. After years of paying your mortgage, you will own your home free and clear. If you make improvements or your neighborhood improves, you enjoy the benefits of your home’s increased value.
With a fixed-rate mortgage, your monthly payment will remain the same for the duration of your loan, less small adjustments for changes in taxes or insurance.
The interest that you pay on your mortgage is tax-deductible. There may be other tax benefits in your individual situation.

Cons:

Your monthly payment builds equity, or ownership, of the actual physical property. After years of paying your mortgage, you will own your home free and clear. If you make improvements or your neighborhood improves, you enjoy the benefits of your home’s increased value.
With a fixed-rate mortgage, your monthly payment will remain the same for the duration of your loan, less small adjustments for changes in taxes or insurance.
The interest that you pay on your mortgage is tax-deductible. There may be other tax benefits in your individual situation.

Pros:

You do not need a sizeable down payment to move in. Most security deposits are around one or two months of rent.
Someone else is responsible for maintenance and repair costs beyond small things. These will be specified in your lease agreement.
If you want or need to move, all you need to do is wait for your lease to expire or break your lease (which may come with financial penalties).

Cons:

Your monthly rent payment goes to someone else who owns the property. At the end of your lease, you do not own any stake in the physical property.
Your rent can go up over time, based on the fair market rent in your area and any improvements that have been done to the property.
Rent is not tax deductible like mortgage interest. Few, if any, renter’s expenses come with tax benefits.