Why is it Better to Pay on a Mortgage Instead of Paying Rent?

Why is it Better to Pay on a Mortgage Instead of Paying Rent?

You’re making an investment. When you rent, do you get the money back when you decide to move? Of course not. When you own your home, however, the rules change. Because property values generally go up over time, you can often sell your home for even more than you bought it for, easily making up for the work you’ve put into the place. In addition, selling the house for more usually allows you to move up in the world, and buy a bigger and better house.

The investment is more than just the money you pay on the mortgage every month. Every repair or improvement you make to the home maintains or increases its value. If you remodel the kitchen or the bathroom, it will be a selling point when you decide to put the house on the market. If you spend money to add on to the house or build a garage, you’ll get it all back when you sell the house.

You’re paying for something you own. To many renters, their apartment is just a place they stay for a while. They know they’ll move in a year or two, and therefore they don’t care what it looks like, or how they could make it feel more like home. But wouldn’t it be nice to be able to make changes to your home without having to harass your landlord? For instance, to paint the walls a different color (instead of hospital-white), or change the light fixtures, or replace the hardware on the cabinetry? When you make changes such as these to a place you rent, all of your efforts are wasted when it comes time to move again.

If you owned the house, even cosmetic changes such as these could improve its appearance, and therefore you would benefit from your changes when you sold the house.

Owning your home means that you can do whatever you want to it. If you decide you want your walls to be fuchsia, there’s no one to stop you, except maybe your family. If you decide to build a better fence, or replace the roof, or remodel the kitchen, it’s your decision. Owning your house allows you to make it look and feel like a home to you, rather than it being just somewhere you live.

You can get the money back on your taxes. Believe it or not, paying on a mortgage means more money in your pocket at the end of the year. This is because you can deduct the interest and mortgage insurance you pay during the year from your taxes. Because mortgages typically put the majority of your payments toward the interest until it is paid off, you’ll have that deduction available to you for many years.

In other words, owning a home will reduce your tax liability and enable you to get a bigger tax return at the end of the year. Unless your rent is free, renting can’t compare to this benefit of owning your own home!

Once you look at the facts, it’s clear that owning your own home is a hundred times better than renting. Your home is the only major purchase you will ever make where you can expect to get more money out of it when you sell it than you paid when you bought it. Paying on a mortgage also enables you to take one of the most significant tax deductions available to you. There’s no question – when compared to the benefits you get by owning your own home, paying rent is a waste of money!

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