3 ms·

Unlike paying renting, paying a mortgage is nice because you're paying for something that is eventually going to be yours.

deleted 5y ago
[deleted]
chii 5y ago
rent is often lower, or the same, as the interest payments. The mortgage consists of both interest and principle payments, which is higher, but the principle payments can be considered equity, so it cannot be compared with rent.
- _3u10 5y ago
  Rent is easily comparable to a mortgage, my old rent is $3750, my new “rent” including property taxes is $3040.
  - listenallyall 5y ago
    > I’m $750 a month up on rent and I’m $123,000 up on equity since May. That’s $123,000 in completely tax free income if I sell. All of HN is really happy for you. You're the man! So smart, and handsome too!
  - jjav 5y ago
    Also, keep in mind rents only ever go up (barring a major economy crash) and mortgages only ever go down or stay same. Long time ago when I was renting, my rent (Silicon Valley) was $1200. I bought a very similarly-sized house and my monthly costs went up to ~$3000. So it hurt for a little while. In just a couple years I had refinanced down to a sub-$2000 mortgage and the rent on my previous place was up to $1500. Getting close to even already. Couple decades later, rent over there is up around $5000 and my mortgage has been refinanced down to $800. By the time I'm retired my mortgage will be $0 and rents might be $8000 or more, let's see what future inflations brings. My advice to anyone early in their career, just buy a home as soon as you can. It'll hurt initially for a few years but you'll set yourself up for a lifetime of being better off than renting.
- King-Aaron 5y ago
  The rental income my wife and I get from our little rental house very nearly covers our principle + interest, so I think it's quite comparable.
- iammisc 5y ago
  My mortgage is less than the rent I was paying. Speak for yourself.
- Spivak 5y ago
  Yep I hit this recently. Over the lifetime of my hypothetical mortgage I would be paying $500/mo more than my rent just in interest. Bleh. Assuming my salary keeps up with inflation this actually becomes a great deal after roughly 15 years (maybe less if my house appreciates in real value) compared to renting buttttt… - I lose the ability to quickly scale down my life if something bad happens to me financially before my 30 years are up. - I’m not really tied to a specific location and right now my career prospects are better if I’m mobile. - I’m not excited to have to basically stop putting money into the market and into a single asset. I can pay less for a mortgage but for worse living arrangements. If that was an acceptable trade I could just find a cheaper place to rent.
- vel0city 5y ago
  My P&I, taxes, and insurance is less than what I paid for rent a few years ago. I get twice the square footage inside, private spaces outdoors, can make any modifications I want. Meanwhile rents in the area increased 10% while my monthly went down due to refinancing. Taxes are only a small amount monthly overall so even if that doubled (it won't at least anytime soon) it wouldn't be as much of a change as the rental market.
- PeterisP 5y ago
  Quite often the landlord will just be paying off an equivalent mortgage, and price the rent as the mortgage payments + maintenance + profit. In areas where living space is in demand and people are building or buying units that were not rentals to rent them out, the rent will be strictly higher than the mortgage including the equity-building principal part.

deleted 5y ago

[deleted]

chii 5y ago

rent is often lower, or the same, as the interest payments. The mortgage consists of both interest and principle payments, which is higher, but the principle payments can be considered equity, so it cannot be compared with rent.

_3u10 5y ago
Rent is easily comparable to a mortgage, my old rent is $3750, my new “rent” including property taxes is $3040.
- listenallyall 5y ago
  > I’m $750 a month up on rent and I’m $123,000 up on equity since May. That’s $123,000 in completely tax free income if I sell. All of HN is really happy for you. You're the man! So smart, and handsome too!
- jjav 5y ago
  Also, keep in mind rents only ever go up (barring a major economy crash) and mortgages only ever go down or stay same. Long time ago when I was renting, my rent (Silicon Valley) was $1200. I bought a very similarly-sized house and my monthly costs went up to ~$3000. So it hurt for a little while. In just a couple years I had refinanced down to a sub-$2000 mortgage and the rent on my previous place was up to $1500. Getting close to even already. Couple decades later, rent over there is up around $5000 and my mortgage has been refinanced down to $800. By the time I'm retired my mortgage will be $0 and rents might be $8000 or more, let's see what future inflations brings. My advice to anyone early in their career, just buy a home as soon as you can. It'll hurt initially for a few years but you'll set yourself up for a lifetime of being better off than renting.
King-Aaron 5y ago
The rental income my wife and I get from our little rental house very nearly covers our principle + interest, so I think it's quite comparable.
iammisc 5y ago
My mortgage is less than the rent I was paying. Speak for yourself.
Spivak 5y ago
Yep I hit this recently. Over the lifetime of my hypothetical mortgage I would be paying $500/mo more than my rent just in interest. Bleh. Assuming my salary keeps up with inflation this actually becomes a great deal after roughly 15 years (maybe less if my house appreciates in real value) compared to renting buttttt… - I lose the ability to quickly scale down my life if something bad happens to me financially before my 30 years are up. - I’m not really tied to a specific location and right now my career prospects are better if I’m mobile. - I’m not excited to have to basically stop putting money into the market and into a single asset. I can pay less for a mortgage but for worse living arrangements. If that was an acceptable trade I could just find a cheaper place to rent.
vel0city 5y ago
My P&I, taxes, and insurance is less than what I paid for rent a few years ago. I get twice the square footage inside, private spaces outdoors, can make any modifications I want. Meanwhile rents in the area increased 10% while my monthly went down due to refinancing. Taxes are only a small amount monthly overall so even if that doubled (it won't at least anytime soon) it wouldn't be as much of a change as the rental market.
PeterisP 5y ago
Quite often the landlord will just be paying off an equivalent mortgage, and price the rent as the mortgage payments + maintenance + profit. In areas where living space is in demand and people are building or buying units that were not rentals to rent them out, the rent will be strictly higher than the mortgage including the equity-building principal part.