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Buying 14% cheaper than Renting

If you do your sums, you will find that renting is costing the average person £100 more a month than they would be for a buying and paying a mortgage.

Halifax released a report this week claiming homeowners spend an average of £600 on mortgage payments compared to £700 in rent for the same size property, making buying 14% cheaper. The fall in the cost of buying compared to the average rent has been significant.

The reversal follows a massive fall in the average mortgage rate for new borrowers – from 5.82% in March 2008 to 3.59% last month, cutting monthly payments by around 39%.

Two issues that make it a little challenging for first time buyers are the need for a substantial deposit and the ability to get a mortgage approved. These two factors alone have taken away the choice, and dictated the renting option only.

The Halifax claim marks a considerable turnaround from 2008, when buying cost 43 per cent more than renting. A low Bank of England base rate of interest, combined with falling house prices, has driven the cost of mortgages down, making buying a more affordable option.

The average mortgage rate for a new borrower has fallen from 5.82 per cent in March 2008 to 3.59 per cent last month, cutting monthly payments by around 39 per cent.

posted by Zane in Guide,Lending,Renting and have No Comments

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