Living in the Vancouver lower mainland comes with many challenges when it comes to housing. Renters face high rental rates but if they look at buying a home the house prices look out of reach. But is it better to rent or buy a home?

I work with at a lot of first time buyers and most are trying to figure if they are better off renting than jumping into the real estate market. One of the challenges for first time buyers is that to purchase a home the amount they will have to spend on housing each month goes up so it looks like it costs more to own than it does to rent. I agree that for first time buyers their monthly cash outflow will increase when they buy a home but is it fair to say that their housing expense has increased?

What is sometimes missed is that your mortgage payment is made up of two parts. A portion goes towards the interest that the lender is charging to lend you the mortgage. The interest is the “rent” you pay to borrow the money. The rest of your mortgage payment goes towards paying off your mortgage. This can be looked at as savings since over time you will pay off your mortgage and then have an asset that could be sold to get your money back.

One of the things I do for the first time buyers is walk them through a simple calculator that let’s them see if the expense portion of the monthly payments is more or less than if they had continues to rent. If you would like to walk through your situation we can see what makes the most sense for you.

Give me a call at 604-961-2400 if you have any mortgage or real estate related questions.

Lawrie