Mortgage rates are going up. Home prices continue to rise. For those that think they missed the boat, you are sorely wrong. If you are renting, you are paying someone else’s mortgage payment. With a projected shortage of homes in Hawaii for the next two decades, home prices will only continue to rise. Yes, we may see some fluctuations but if you look at the trajectory, it is up.
This week I would like to share with you a 10-Year comparison of continuing to rent, or buying a home. The benefits of buying so outweigh renting, after you see this, you would be crazy to keep paying someone else’s mortgage instead of your own.
Here’s the simple comparison. Buy a home for $650,000 with 10% down. We’ll use a mortgage rate of 4.750%, and since you are putting less than 20% down, you’ll also have mortgage insurance. On the rent side we’ll use a starting rent of $2,352 that has an annual increase of 3%.
In the example above, we’ve tried to keep it simple, but made sure we didn’t miss any of the main costs, expenses, or benefits.