Homeowners are allowed to deduct mortgage interest and property taxes when they file tax returns each year. This significant savings from tax benefits can often make owning the same as, or cheaper than, renting.
Your Monthly Payment is Fixed
If you get a fixed-rate mortgage on a home purchase, your mortgage payment can never change, but unless a renter is in a rent-controlled building or neighborhood, their rent is at risk of rising every year.
When a homeowner is making a mortgage payment the loan pay-down each is essentially the owner being required to invest in their own home, so it’s like forced savings that benefits the owner — whereas the entire portion of a renter’s monthly payment is going to a landlord.
But the most important
question to ask is
- How long are you planning to stay in the area you live?
Your intended length of stay has a huge impact on whether it makes more sense to buy or rent. To reduce your risk, it's important to stay in a house long enough to reduce your debt and to allow for meaningful price appreciation. If you're planning to stay more than 3 years, it's likely that buying a home will prove to be a financially good decision.