To Buy or To Rent?

Are you in a dilemma about whether to rent or buy in the current market?  With increasing house and rent prices this is far from a straight forward decision. Read below the factors I think you need to consider.

1. Current rent – would you be better off converting your monthly rent into a mortgage repayment? With rising rents, it is becoming more and more sensible to start thinking about buying. For example, a one bedroomed apartment costing €270,000 commands a rent of €1,800 per month. If you had the 10% deposit, a 30 year €243,000 mortgage at 2.3% interest rate (best 2 year fixed rate) would cost €935.07 per month – that is half of the monthly rent.

2. Costs – rent normally includes building insurance, Local Property Tax, maintenance, repairs, gardening (if there is one) and all furnishings. Buying your own place you have all these costs and more. Bin charges, housing association expenses, security monitoring etc. Suffice to say your home can become a money pit between those costs and regular renovations – you need to factor in all these to the equation.

3. Lifestyle – are you at a stage in life where planning your financial life needs to start sooner than later? What is your top financial priority now? Do you want the responsibility and all that goes with that of owning a home now? Does your work keep you in one place?

4. Income – all lending is based on the ability to repay. You might be purchasing a property worth €500,000 and looking to borrow only €100,000 but if you cannot prove you have the capacity to repay that loan, the lender will not approve.

5. Savings – not only will you require at least 10% of the purchase price of your new home . You will also be required to have a saving ethic established so the new monthly mortgage repayment does not come as a complete shock to you. Ideally you should be saving at least 6 months prior to your mortgage application on a regular basis. This is addition to any rent you may be paying.

There you have it – depending on your answers you have your decision made. Now all you need is perseverance, determination and strength of mind. Best wishes on your journey and if I can help, do give me a call on 087 2500716.

Michelle