if i rent i pay £200, if i go for mortgage i pay £300 for same property and must put 30% down,what is better?

Question

due to property bubble, property prices are 25% up yearly over last 3 years, whereas rent is constant (as tenants still earn the same and couldnt afford it). i can buy a property as banks give motgages willingly, but i will end up paying more then renting

and morgtage payments may be even increased by a bank say in 10 years, while rents r unlikely to be above what people earn.

Answer 1

It better to pay for a mortgage. However you have to make sure that you can afford it. Otherwise you would loose too much because of hasty decisions. Go to your bank and talk about your financial situation with them. Shop around for a while before buying anything.

Good luck !

Answer 2

A simple answer: try a lease vs. buy analysis tool in the Internet. Reading your question, however, I detect some confusion of inexperience. So I will try to clarify a few things. The property bubble you mentioned (increase in value of real estate) may be good if you have the money to invest today, using a fixed rate mortgage loan. For instance, assuming a 30% down payment (seems high) you would finance 70% at 6.5% fixed for 30 years. Every year you would be accumulating equity by making your monthly mortgage payments. You also accumulate equity faster by virtue of the property appreciation (your 25% property bubble). However, you must consider all the ownership costs in the evaluation model: property maintenance, insurance, taxes, etc., as well as the tax exemptions or write offs as allowed by local tax authorities. Owning your own home is almost always a good investment, if you can afford it. Renting is only a necessary expense for most who can not purchase a home (the majority).

Answer 3

At the end of 10 years of rent all you will have is 10 years worth of rent receipts, after 10 years of buying you will probably have 1/2 your mortgage paid off and you will well be on your way to owning property. Why pay off someone elses mortgage?

Answer 4

It is better to be a homeowner than a renter. When you rent an apartment, your payment goes down the drain before your eyes, whereas if you own the house, you are making payments and expect to own your house after a certain number of years. Also, the interests are tax-deductible.

Answer 5

I'll be honest with you. I never liked renting. At least with buying, you gain an asset in your home which you can always borrow against in a time of emergency. With a rent, that money is gone and never comes back