There are many reasons why you should consider jumping into the real estate market and buying a home. Below is a list of 5 reasons to buy a house rather than rent.
1) House prices tend to rise over time, so a house is one of the best investments you can make. Home prices have risen three to six percent a year for the last 20 years and the trend is likely to continue. So if you buy a home now, you’ve put your capital in a safe investment where it is likely to grow.
2) You’ll pay less tax. You can deduct the interest you pay on your mortgage from your total income. The value in this tax break depends on factors like your personal tax bracket, the size of your mortgage, the rate of interest you pay on it and how long you’ve held the mortgage. As a rule, the newer the mortgage, the greater the amount of interest you pay each month and the bigger the tax break. Therefore, recent buyers with young mortgages tend to get the greater benefit.
3) You’ll be buying a piece of real property rather than putting money into your landlord’s pocket every month. The real cost of renting is higher than the monthly payment. There is also an opportunity cost equal to the amount you would gain by using the money to purchase a home instead. Even if the house you purchased did not appreciate in price, you would be able to sell it and recoup some of the money you put into it.
4) Interest rates are still very low historically. This makes it inexpensive to have a mortgage. The lower the interest rate, the less you actually pay for you house and the faster you pay the mortgage off.
5) You’ll be able to use the equity in your home for low cost loans for other purposes. You can access the paid up equity you accumulate in your home in the form of a home equity loan home equity line of credit. Because they are secured, home equity loans and lines of credit generally carry a lower interest rate than other types of consumer loans, such as auto loans. The interest on them is generally tax deductible, as well.
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Hi, I'm Ian. I am a Toronto-based mortgage agent who helps people get approved for the mortgage they need, with maximum options and at the best rate possible.
Call me today at (416)254-8131 to get answers to your questions about mortgages and current rates.