Quote:
Originally Posted by Red
It really comes down to this. "Rent" from the bank as you called it or rent from a landlord.
$1800 rent is equivalent to about 400K mortgage. So when you get that mortgage, you pay that "rent" for 25 years. At the end you have a place to live for free. Or you sell it and move in with the kids as payback :-)
Either way, you have an asset.
By renting you sign up to pay that same amount a month (probably more) for all of your adult life. Is that 50 years, 55, 60? A lot more than 25.
You said you'd be scared to have a mortgage till retirement. Isn't having a rent payment in retirement a scary alternative?
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Rent vs Interest plus tax plus maintenance +/- appreciation
That’s it. The fact you own something at the end is not material to the cost calculation as the capital payment of the loan is a revenue neutral transaction. Also any capital payment on the mortgage only has an ROI of the interest rate. Your false assumption is that cost of Rent = cost of mortgage payment. The difference in cost between the two options will determine which one is better.