As we discussed earlier this week, there are both short and long-term factors to consider when deciding to buy a new home. But at the heart of most of these factors is a simple question: is buying this house cheaper than renting? And to answer that question, you need to ask yourself if your concern is the short or long term.

For many, renting is cheaper than buying a house in the short term. A security deposit will generally be less than a down payment, and you can usually rent a house for less than a monthly mortgage on the house. If any work needs to be done to the house when you move in, as a renter you will have only to call the landlord and they must foot the bill.

But in the long term, home ownership becomes substantially “cheaper” than renting, in just about every sense of the word. Your mortgage payment (assuming you fix your interest rate) will not change over time. Your rent, on the other hand, will. Rents go up. That is a simple fact. So while your rent may be less than a mortgage payment right now, will that still be true in 10 years?

You also have the option to refinance a mortgage. So, if your situation changes in 10 years and you need to lower your monthly payments, you can refinance your home and bring those payments down. There is no option to refinance your rent. There is also an end to a mortgage – once it is paid off, you no longer have to pay to live. Renters never have that end result available to them.

There are many benefits to owning a home, and if you have any questions about how buying a home would benefit you, please contact me. If you have anything to add about home ownership being cheaper than renting, please leave a comment.