Renting vs. Buying in Mississauga
Tuesday Sep 21st, 2021
To rent or buy in Mississauga? That is a question running through many first-time buyers’ minds these days, especially as the real estate market continues to reach new levels.
Conventional wisdom says that homeownership is a better option because it is an investment into your future. With historically low interest and mortgage rates, it’s a good time to consider buying a home.
However, a decision of this magnitude comes down to personal preference and your lifestyle. Is homeownership the right choice for you right now? Or is renting more practical and affordable?
Here are five questions to ask yourself:
1. Where do you see yourself in five years?
A lot can happen in five years. Job and travel opportunities, marriage and children, schooling and other life changes can have a direct impact on your homeownership experience. Before spending hundreds of thousands of dollars on a new home, consider your five-year plan to make sure that your priorities are in line.
2. Have you calculated the cost of carrying your own home versus the cost of renting?
If you are leaning more towards renting, calculate the cost of carrying your own home (your principal and interest payments, plus property taxes) and compare it to the cost of renting. You may find that the costs are similar.
3. How much have you saved for a down payment?
The minimum amount you need for your down payment depends on the purchase price of the home. If your down payment is less than 20% of the purchase price, you must purchase mortgage loan insurance.
4. Do you have money saved for closing costs?
While first-time buyers don’t have to pay certain fees, there are several closing costs to consider. These can include mortgage loan insurance, appraisal and land survey fees, deposits, application fees, mortgage broker fees, home inspection fees, legal costs, land transfer taxes and more.
5. Are you prepared to handle the additional responsibilities and costs associated with homeownership?
As a homeowner, you are on the hook for all maintenance and repairs – both physically and financially. A good rule of thumb is to estimate your maintenance costs around 3-5% of your home's value per year. If you are not handy and prefer to hire out, that percentage may need to be increased.
There are many online calculators to help you determine the costs associated with renting vs. buying. This is a great way for first-time buyers to gain a clearer financial picture of homeownership. It’s also advisable that you talk to your mortgage lender to learn how much you can afford.
Still unsure if you should rent or buy? I can help. As a real estate sales representative serving Mississauga, I’ve had the pleasure of helping many first-time buyers call our community home.
I work with my buyers every step of the way, from getting qualified by a financial institution, finding a new home, negotiating the best price, arranging home inspections, choosing a lawyer and re-visiting the property before closing. I also help my clients navigate Mississauga's highly competitive real estate market in a stress-free, effective manner.
To learn more, please feel free to contact me, Deborah Clerk, at Keller Williams Real Estate Associates, Brokerage in Mississauga.