Mortgage or rent an apartment: what is more profitable in 2021

Mortgage or rent an apartment: what is more profitable in 2021

If you do not want to live with your relatives, but the funds are enough only for relatively small payments, there are only two possible options: a mortgage or rent a quartet. Someone says that it is better to rent a house and at the same time save up for the purchase of their own square meters. Someone at the slightest opportunity chooses a mortgage. What is more profitable in different situations, let’s figure it out.

Benefits of mortgages

You should think about a mortgage loan if you have a stable job, sufficient savings for a down payment, including any benefits, military savings or maternity capital. In addition, the advantage will be a “net” income, which allows you to take advantage of the property deduction.

Consider the main advantages of a mortgage:

The opportunity to live by your own rules. The apartment is your property. You can install a shower cabin instead of an unnecessary bath, paint the walls in the color you like, at any time make a rearrangement or completely change furniture, get a pet, invite relatives to visit, replace windows, etc. You no longer have to ask the owner if you can hammer 2 nails into the wall to hang an additional shelf.

Fixed payment. Mortgage payments do not depend on the situation on the real estate market, the dollar rate or the mood of the mortgage manager. Will you ever receive a call from a bank employee, with a message that the mortgage payment you have been raised by so much interest.

Possibility of early repayment of the loan. At any time, if you have enough funds, you can close the mortgage or shorten its term by increasing the monthly payment.

Permanent address and residence permit. This, first of all, is relevant for families with children. You can safely send your children to school or kindergarten, without worrying that soon in connection with the move you will have to look for a new educational institution or spend hours on the road to the old one.

Confidence in the future. No more worries about the fact that the owner can sell the apartment or give it to his relative, asking to vacate the area.

In some cases, it is profitable to take a mortgage and rent out an apartment to recoup the money spent. But this does not solve the main question – where to live. The pros and cons of this approach we have already considered in past publications.

Pros of renting an apartment

The advantages that a mortgage gives, renting an apartment in some situations may be the best option.

Mobility. If the work is associated with long business trips to other countries or cities, it is unlikely that you will buy an apartment in each locality. This also includes a situation where there are no definite life plans regarding the place of residence and you are still deciding where you would like to settle.

The opportunity to immediately check in. This is probably the main advantage of renting an apartment over a mortgage. It is more profitable to take housing with an encumbrance at the stage of building a house.

In this case, even after paying the fee, you will not be able to immediately enter. As for rent, in the first minutes after payment and signing the contract, you get the key to the ready-to-live housing.

Economic benefit. In most cases, rental housing is several times cheaper than mortgage payments. It is enough to pay the cost of 2 months of accommodation and you can check in.

Of course, each case is individual and it is simply impossible to predict all possible nuances. We hope that the benefits listed above will help you find the answer to the difficult question of what is more profitable in 2021, a mortgage or rental housing, in your situation.