Should you rent vs. buy a home?
How do you know if buying a home is right for you? Before you commit to a mortgage, consider the costs, responsibilities and benefits of buying vs. renting a home.
Things to think about.
If you’re thinking about buying a home, there are many factors that may affect your ability to qualify for a mortgage, like your income, job status, savings, debt and other considerations. We can help you develop a plan to get there.
If you do qualify for a mortgage, you may still want to compare the ongoing pros and cons of renting vs. buying a home before you make a decision.
When you own your home:
- You are responsible for repairs, maintenance, insurance, property taxes and other costs
- You need to commit a large portion of your savings to a down payment
- You may be able to earn money by renting out extra space
- When it comes time to sell your home, you could be exempt from paying tax on any profit you earn (known as capital gains tax), as long as the home was your primary residence for every year that you owned it
- You may be able to use your home equity to finance another investment
- Your may gain financial security for your family or for retirement
- The market will dictate the value of your property
- You may not be able to sell when you want or need to access ready cash
- You need to commit to ongoing mortgage payments
When you rent a home:
- You are responsible for fewer (or no) repairs, maintenance, home insurance, property taxes and other costs
- You pay lower upfront monthly costs, but your monthly payments may increase year over year
- You have more flexibility to move if or when you need to; however, you may be required to move before you’re ready
- There is a risk that your lease will not be renewed
Other potential costs.
Before you make a decision, it’s important to understand the total cost of home ownership, including fees, taxes and monthly payments.
On top of your down payment, you’ll also need to pay property transfer tax, legal fees, appraisal fees, home inspection fees, home insurance and moving costs. Not sure whether your budget can stretch to cover these fees? Learn more about the costs or chat with a mortgage specialist who can help you figure it out.
