Compare owning vs. renting
There are many advantages of owning a home, both financial and emotional. But there are a lot of responsibilities, too.
Benefits of Owning
The house is yours — you can do what you want to it.
Renters are usually extremely restricted; sometimes they can't even repaint the walls. If you own your home, the only restrictions are local building codes.
You may be able to have more stable housing costs.
With a fixed-rate mortgage, you'll be able to predict your monthly payment amount. Property taxes and insurance are the primary things that can change the monthly cost of your home. Renters, on the other hand, could face big rent increases each time they move or if their lease is renewed.
You may be able to reduce your income tax costs.
You can deduct mortgage interest and your local property taxes at tax time. That could save you a lot, especially in the early years of your mortgage, when your payments will be mostly interest. Renters don't get this tax break. Consult a tax advisor about your personal situation.
Eventually, you will own a home free and clear, with no payments required.
Whether you get a 15- or 30-year loan, at the end of that time, the house will be yours. Renters will have to pay rent every month indefinitely.
A house can increase in value.
Depending on where your house is located, what kind of house you have and economic conditions, your house may become worth more than you paid for it.
Benefits of Renting
You don't have to handle the repairs and upkeep.
If you have a leaky sink in a rental property, all you have to do is call the landlord to fix it. If you own the home, you have to hire a plumber, or fix the leak yourself.
You may not have to cover insurance and utilities.
These costs can add up quickly and strain your budget. Renters are often buffered from these costs, or the costs are rolled up into their rent.
Moving is a lot less complicated.
A lease is a shorter-term commitment and when it expires, renters are free to go. As a homeowner, you'll have to worry about finding someone to either rent your house or buy it.
A house can lose value.
While your house could go up in value, it can also go down, as many did during the housing crash that began in 2006. If your house loses value and you need to sell, you'll need to repay the full amount of your mortgage even if your house is worth less in the current market.