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> your buying power moves with the market and your "rent" is limited to the interest you pay on your loan (because you're paying down the principal as well). T

> your buying power moves with the market and your "rent" is limited to the interest you pay on your loan (because you're paying down the principal as well). The "because you're paying down the principal as well" seems like a red herring, no? If you bought a house for $10.00 and paid $100.00/month, it'd still be worth it even if none of that went to the principal. Heck, even if your house became worthless too, it'd still be worth it! > When you're renting, you're flushing your money down the toilet plus trying to save enough for a deposit relative to a market price that accelerates well beyond almost everyone's capacity to save. How do people make such a broad generalization without looking at any numbers? Shouldn't the costs and benefits of this depend on factors like the mortgage/interest rates? Is there a reason to believe that it's a net benefit regardless of the interest rate?

dools 3y ago
> If you bought a house for $10.00 and paid $100.00/month, it'd still be worth it even if none of that went to the principal. Heck, even if your house became worthless too, it'd still be worth it! Paying off an interest only loan on a property may well be better than renting but it’s more like renting than paying principal + interest. When you pay off an interest only loan your “rent” costs are your entire mortgage payment. When you’re paying principal + interest the “rent” is still only the interest portion of your payment. In both cases you keep pace with the market better than if you’re renting. If the only way you could avoid renting were to get an interest only loan then that’s certainly a better option. > Is there a reason to believe that it's a net benefit regardless of the interest rate? Yes renting is objectively the worst possible financial situation regardless of interest rate (definitely true in Australia, possibly true elsewhere as well).
- dataflow 3y ago
  Aren't you still assuming that the monthly payment is the same for mortgage vs. rent? When they're the same, obviously buying is better. But the entire point I was making with my example was that those aren't necessarily the same, so you can't just say "renting is worse" without comparing the numbers...

dools 3y ago

> If you bought a house for $10.00 and paid $100.00/month, it'd still be worth it even if none of that went to the principal. Heck, even if your house became worthless too, it'd still be worth it! Paying off an interest only loan on a property may well be better than renting but it’s more like renting than paying principal + interest. When you pay off an interest only loan your “rent” costs are your entire mortgage payment. When you’re paying principal + interest the “rent” is still only the interest portion of your payment. In both cases you keep pace with the market better than if you’re renting. If the only way you could avoid renting were to get an interest only loan then that’s certainly a better option. > Is there a reason to believe that it's a net benefit regardless of the interest rate? Yes renting is objectively the worst possible financial situation regardless of interest rate (definitely true in Australia, possibly true elsewhere as well).

dataflow 3y ago
Aren't you still assuming that the monthly payment is the same for mortgage vs. rent? When they're the same, obviously buying is better. But the entire point I was making with my example was that those aren't necessarily the same, so you can't just say "renting is worse" without comparing the numbers...