Mortgage or rent. Which is better?

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mortgage, rent, what is better rent or mortgage, mortgage in 2019, what to choose a mortgage or rent

What is more profitable in 2019: to rent a house or take a mortgage? We analyze the pros and cons of renting real estate and mortgage.

Each person, faced with the housing issue, asks himself, what is more profitable – to rent a house or to issue a mortgage and pay monthly for their own housing?

"Mortgages are more expensive, as the Bank puts its risks and earnings in the cost of a mortgage loan, but it is thanks to the mortgage that many families have the opportunity to buy a house."

Mortgage loan requires the most responsible and serious approach. If the borrower is well understood with the amounts, terms and upcoming payments, has a stable income and is able to live according to the plan, the mortgage will be an excellent option for improving housing conditions.

It is clear that each person has his own life circumstances and opportunities. It is impossible to answer this question unambiguously. So let's look at this issue from different angles.

Mortgage or rent? Mathematical calculation

mortgage, rent, what is better rent or mortgage, mortgage in 2019, what to choose a mortgage or rent

Many are interested in a mathematical assessment: what will be cheaper: to rent a house or take a mortgage.

Young and large families, agricultural specialists in the Russian Federation have the right to take advantage of the interest subsidy by participating in the program of concessional lending.

"From January 1, 2018, families in which the second and subsequent children are born, have the opportunity to issue a more favorable mortgage – at 6% per annum."

Different banks offer different lending terms. Below is a table in which we use the average data on rental and credit rates.

The class of accommodation and number of rooms

The average price of housing, million rubles.

Preferential mortgage (9.8%), RUB.

Ordinary mortgage (12% and above), RUB.

The average size of the lease, RUB.

Downpayment, %

Monthly payment (20 years)

Downpayment, %

Monthly payment (20 years)

Economy housing, 1 K

6

20

45 687

15

56 155

30 290

Economy housing, 2 K

9

20

68 530

15

84 233

38 910

Economy housing, 3 K

11,9

35

73 622

15

111 375

49 010

Business class, 1 к

12,1

35

74 860

15

113 247

50 930

Business class, 2 к

19

60

72 337

15

177 825

72 240

Business class, 3 к

25,9

70

73 956

15

242 404

138 140

 

The table shows that, for example, in the case of a 1-room apartment of economy class, the average monthly payment on a preferential mortgage will be about 45 thousand rubles, while renting an apartment of the same level can cost about 30 thousand rubles. However, if you have the financial opportunity to increase the amount of the down payment, you can achieve the same 30 thousand rubles per month.

"There is an unspoken rule: if there is about half the cost of the apartment, it is advisable to take a mortgage and invest in their own housing. If less money, it is more profitable to rent."

Is it profitable to rent an apartment

mortgage, rent, what is better rent or mortgage, mortgage in 2019, what to choose a mortgage or rent

Renting an apartment has its advantages:

  • Renting an apartment in different parts of the city, you can add your own opinion about the pros and cons of a particular area (whether it is convenient to live with children, whether the infrastructure is developed, which public prevails, etc.).
  • You can find accommodation closer to work or school and save on travel (and it's not just about money, but also about time).
  • You do not expose yourself to risks: the economic situation may change at any time, you may lose income, and if you add a mortgage, it becomes scary. Renting a house, you can find a cheaper option.
  • This item is also associated with risks: if you buy a new building, much depends on the integrity of the developer. While the house is not put into operation – it's not real estate, but a construction object. Therefore, if you invest money at the initial stage, you must understand the risks.
  • Many people, especially at a young age, prefer to lead an active lifestyle without reference to a specific place of residence. They seek to increase passive sources of income and have freedom of movement. For such people, rental housing is an excellent choice.

Is it profitable to take a mortgage loan

mortgage, rent, what is better rent or mortgage, mortgage in 2019, what to choose a mortgage or rent

The most important advantage of the mortgage is that you start to invest in their own homes. The cost of apartments is quite high, so many families can not improve their living conditions without assistance.

"To borrow money to buy an apartment from relatives and friends, most likely, will not work. No one holds hundreds of thousands of rubles or even millions. Even if someone has such money, he tries to put the money into circulation."

Banks can help with financial problems, because it is for these purposes that a lending service has been created. With a loan you can get what you want as soon as possible. Of course, it will have to pay. All you need to purchase a home - is to choose a reliable Bank, choose a profitable program and collect the necessary documents.

Mortgage is not an investment

mortgage, rent, what is better rent or mortgage, mortgage in 2019, what to choose a mortgage or rent

It is important to understand that mortgage is not a profitable investment, but a financial instrument that can be used to achieve global goals. This is a long-term financial transaction, which should be entered into only after careful analysis and calculations.

Mortgage will have to pay for decades, so do not start only from the current circumstances. Think carefully, plan and stick to the developed schedule. Only competent organization of your life will help to realize the dream – to buy your own apartment.

Any questions – leave them in the comments. Our experts will respond to you as soon as possible.

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