4 ms·
How do you figure? Its heavily market-dependant, but assuming rent expenses = the cost of interest, from a financial perspective they are close to equivalent.
by Panzer04 2y ago
How do you figure?
Its heavily market-dependant, but assuming rent expenses = the cost of interest, from a financial perspective they are close to equivalent. If you take the money that would be paying off the mortgage to invest, you should be in a similar financial position at the end.
1-1 compariaons are hard, though, because in practice houses are huge levered bets on a RE market, so they can have huge returns if chosen well. Those are usually the kinds of markets where rents tend to be lower than the mortgage payment, however, so things might net out more even than you'd expect at the end.
- jb1991 2y ago> assuming rent expenses = the cost of interest But you cannot make even this simple assumption because rent is not tax deductible but mortgage interest usually is.
- Panzer04 2y agoDepends on the country I guess. Mortgage interest in AU is not tax deductible unless it's an investment (ie. owner-occupiers don't get a deduction). Consumption is not generally tax deductible, was my understanding (and living in a house is basically consumption)
- jb1991 2y agoUSA and many European countries deduct mortgage interest from income tax.