Purchasing a home is a big decision, and it is important to take the time to understand if you are ready to make the move from renting to buying your home. It is a personal decision and there are many factors to consider that are unique to you. Owning a home will most likely be the biggest investment in your lifetime.
The earlier you can re-direct your rent payments into a mortgage payment the faster you will start building equity in your home. Equity is the difference between the value of your home and the amount you owe on your home, and as you pay down your mortgage, or the housing market changes, your equity has the opportunity to grow.
But this doesn't mean that home ownership is the right fit for everyone. If your move is short term, or you are not sure yet of where you want to live it may be worthwhile to continue to rent. Owning a home is a long term commitment.
On our website we have a rent or buy tool that you may want to take a look at to understand what your current rent payment would equate to in a mortgage amount. For example:
If you are currently paying $1000 a month in rent, based on today's 5 year interest rate, amortizing the full amount of your mortgage over 25 years, and making a 10% down payment, this could equate to a house valued at close to $200,000.
It is important to keep in mind as a homeowner there are extra costs you need to account and budget for which may include: property taxes, property maintenance costs, utilities, and condo fees.
Weigh the pros and cons and determine when you are personally ready to make the move from renting to buying. If you are ready, or need help to determine if now is the right time for you, contact one of our RBC Mobile Mortgage Specialists to help you work through the numbers.
For more information, please visit the RBC Advice Centre.
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