Re:Home ownership is still mostly renting
by FreezeInTheDark on Wednesday September 22, 2021 @11:40AM
(#28617635)
In my experience in the recent market (in a HCOL city in the U.S.), rentals (even only compared to the costs in homeownership, i.e. ignoring principal payments) are much cheaper than mortgages for an equivalently sized house/unit. That's the assertion of the article, and it rings true.
You're right that the bulk of the mortgage payments, especially towards the beginning, do not go towards building any capital, which makes the investment even less appealing.
Re:Home ownership is still mostly renting
by shapefrog on Wednesday September 22, 2021 @11:55AM
(#28617876)
In my experience in the recent market (in a HCOL city in the U.K.) rent is only marginally less than the interest on the equivalent mortgage.
All the cost calculations should be based off interest only. The principle repayment is a cashflow issue - and a signifcant one at that.
Re:Home ownership is still mostly renting
by sayonaraman on Wednesday September 22, 2021 @06:38PM
(#28622925)
can confirm, monthly mortgage payment + taxes is about twice the monthly rent on similar property in HCOL US cities
However, you're missing the point. People MUST live somewhere.
Their only alternative investment is with regard to their down payment for money saved, or the amount of money that is (mortgage - equivalent rent), which is usually negative!
The BULK (or entirety) of the money they spend on their mortgage is not money that would otherwise be available for alternative investment.