Rent or buy: neither is cheaper option for everyone

By |

Many renters considering switching from a lease agreement to a mortgage can find it difficult to fully assess which path is more beneficial, but the best solution can only be decided on a case-by-case basis, according to aggregator Loan Market.

Loan Market corporate spokesperson Paul Smith said that while some public data could be used to justify both sides of the argument, borrowers need to consider their own personal circumstances and financial goals to determine if they’d be better off owning or renting.

“If you’re looking at purchasing a property, you should research similar properties in the area and see what type of rental payments are being asked for. You should then work out exactly what your mortgage repayments would be after establishing your home loan.”

Smith also argued that it’s crucial for first home buyers to consider their options on a case-by-case basis and said that, when comparing rental and mortgage repayments, it’s important to evaluate the property from both a renter and home owner perspective, taking into account the different  calculations and costs that need to be factored in for each.

Michelle Hutchison, spokesperson for financial comparison website RateCity, agreed.

 “The biggest danger with buying a home for the first time is that you’ve never experienced re-adjusting your budget and fall short when rates rise. Interest rates are currently at record lows. It’s easy to get used to paying low interest but rates are likely to rise eventually and borrowers should prepare now by adding to your repayments.”

Smith said renters who are considering purchasing their first home should create an educated estimation of rental repayments of the properties they’re interested in, calculate inflation of both rent and property value based on current inflation rates – not targeted ranges – and remember that the interest rate on property won’t stay at its initial rate through the course of the loan.

“There are advantages to being both a renter and a home owner and those benefits should align to your own financial goals. With so many factors influencing buyers’ repayments, it takes some investigation to determine if you’re better off renting or buying.”

Top Suburbs : flemington , the basin , penrith , mt lawley , trott park

Submit a comment

go back

Get help financing your investment

It can be confusing deciding on the right loan for your investment needs. That's why it's important to not only check the right rates, but make sure that you're getting the right features in your home loan.


Just fill in a few details below and we'll then arrange for an Aussie Mortgage Broker to contact you and work out what features or types of loans are right for your needs. We'll even do the running around and the paperwork. Plus, our mortgage broking service is at no cost to you.


Compare home loans offered by up to 19 banks and lenders

How soon would you like a mortgage?
What is your Annual Household Income i $
Do you currently own any Investment Properties?
Do you own your own residence?
How much equity do you have in all your current properties?
First Name
Last Name
Where do you live?
What number can we reach you on?
E-mail address
We value your privacy and treat all your information seriously - you can check out our privacy policy here
Add your comment