Buying is cheaper than renting in 90% of major towns!
A leading property search website has compared the costs of buying and renting in all UK towns. It claims that it is now cheaper to buy a home than rent in 46 of the 50 largest towns across Britain, with only Aberdeen, Swansea, Cambridge and Plymouth as the exceptions.
The report says that on average, the cost of renting is now 13 percent higher than paying off a mortgage, considering the payments to an interest-only deal with a 5% interest rate payment. Crucially, the comparison is based on monthly costs and does not take into account the deposits and setup fees. A borrower would need to raise a deposit of around 15% of the property price to obtain even that 5% rate (there are considerably lower rates available).
With house prices down, low interest rates and sky high demand in the private rental sector, now really is the time to buy if you are able to.
The benchmark figure for accessing the best mortgage rates is a 25% deposit. Right now if you are able to raise this, you could fix for five years at around 3.40%. If you could only secure a 10% deposit, you will be looking at the 5.00% rates.
12th October 2011 • Anna Whyte, kindly reproduced with permission from if I were you.
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