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this post was submitted on 02 Oct 2024
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Same with homes, renting can provide lower monthly payments vs a mortgage. But with a mortgage you own the home and eventually you'll have no monthly payment, whereas renting means you'll always pay and the landlord has the final say in matters.
Do you? Or do you start owning it after paying off the mortgage?
Ya, the house is in the persons name. But if they struggle to keep up with payments, it can become the banks home.
At least you can't get kicked out or have your rent raised for arbitrary reasons. Some renters are basically moving every year.
Fair enough, I suppose. Although I'm relatively sure that the bank can mess with the credit conditions
Mortgages can change repayments amounts as the central lending rate changes.
We’re in a squeeze in Canada right now because rates went up and a bunch of mortgages are up for renewal. (5-year fixed rate is standard here)
In Spain you can decode between fixed or variable rates, and although fixed rates are usually a bit higher, having the peace of mind that suddenly the mortgage won't raise next month and being able to plan around a fixed monthly cost is such a big peace of mind.
Fixed rates are the best.
Fixed rates are safer, for sure.
But during the pandemic, when rates went to near zero, I was very glad to be on a variable.
It went up a little, but nothing compared to the equivalent in rent you'd pay for the same place.
It's actually pretty comparable for me. My mortgage went up 40% which made the whole monthly cost of housing go up by 28%. Rents in the same building went up similarly but actually haven't quite caught up.
Not in the US if you have a fixed rate mortgage, and most do. There's tons of people who locked in rates at below 3% back in 2020-2021.