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Rent vs borrow

February 24th, 2015

In the rent versus buy debate there is no clear winner. The important thing is to choose what’s right for you.

In the short term at least, renting can be easier than owning your home. You don’t need to worry about maintenance or repairs, you’re free to move on once the lease expires and it’s often cheaper to rent especially if you share with a few mates. The trouble is, if one of your flatmates pulls stumps you could be lumbered with their share of the rent. You’re also likely to be living with some pretty restrictive lease conditions – like regular property inspections, rent hikes once or twice a year, and you could have limited opportunities to stamp your personality on the place.

Nonetheless if you want to be able to move around at will or you’re just not ready for a major financial commitment, renting can tick plenty of boxes.

Buying is sensible…when you’re ready

Despite the potential freedom of renting, the time often comes when we start to think about buying a place of our own. With interest rates currently at record lows, there is certainly a good incentive to think about getting into the market now. Nonetheless the prospect of buying property and learning to live with a home loan can be daunting, and you need to be sure it’s the right decision for you.

If you’re unsure about which way to go – rent or buy, the ‘Building Financial Confidence’ course offered on ME Bank’s website offers some useful tips, and offers an unbiased view of the pros and cons of renting and buying.

Save with lower borrowing costs

When you’re ready to buy, one of the best ways to streamline the transition from tenant to home owner is by keeping a lid on borrowing costs. A sensible starting point here is to save a reasonable deposit. A simple way to fast track your deposit is with a high-interest savings account.

Look for all-round value

Your choice of home loan matters too. It pays to focus on overall value because while one-off perks like discounts on upfront fees can be tempting, they could mask an uncompetitive rate. A consistently competitive interest rate and flexible features will work together to trim your borrowing costs and make the loan easier to live with.

To find out more about home loans to help first home buyers, call ME Bank on 13 15 63 or visit mebank.com.au.

Members Equity Bank Limited ABN 56 070 887 679 AFSL and Australian Credit Licence: 229500.

This content was provided by Members Equity Bank. The views expressed are not necessarily that of First Super.