Both renting and buying come with pros and cons that you should consider before making a decision whether to rent or buy a home. The table below offers some of the key things you'll want to keep in mind:
| Renting |
Buying a Home |
| Pros: | Pros: |
| Smaller amount of cash required upfront (i.e. first and last month's rent versus a down payment) |
Potential to gain equity and financial security, especially as the mortgage is paid down |
| Usually less maintenance compared to owning your home |
As your house increases in value, you realize the gain (not someone else) |
| Monthly costs are usually fixed |
You can make changes to your home as you wish |
| Greater flexibility in being able to move |
Stability of having your own place and no worries that the landlord might sell |
| Extra facilities may be available (e.g. recreational facilities if renting in a large apartment building) as compared to a single family home |
After a number of years when your home is paid in full, your monthly mortgage payments stop |
|
Fewer restrictions (e.g. pets, smoking, etc.) |
| Cons: | Cons: |
| Depending on rental type, there could be more noise and less privacy than having your own home |
More responsibility-you will need to pay for and/or perform the upkeep and maintenance |
| Money you pay is equity for someone else |
May be a higher monthly cost - depending on upkeep and maintenance |
| You don't have complete freedom in decorating or remodelling |
More cash is usually required upfront (i.e. down payment and closing costs) |
| Rent is a never ending monthly payment - unlike a mortgage, which has a repayment schedule with an end date in sight |
No guarantee your home will increase in value, although in many cases it does |
| Rental payments can be increased every year - a mortgage payment can be set for a length of time that suits your needs |
May have less flexibility in being able to move (depending on your expectations for selling price, etc.) |
For help answering this question, as well as links to tools and calculators that can help you make a decision, see: Are You Ready to Buy a Home?
