Hmm… Endlessly give money to someone and own nothing in the end while paying for someone else’s loan, or repaying a loan over something you own and not have to pay once you’re done. I wonder which one is best.
It’s not wasted. You get somewhere to live for the month for the rent. It’s like saying all food I buy is wasted money because I’ll just be hungry again next month.
If you’re paying a mortgage, you get to live there for the duration of it, and then you get to own the place at the end.
If you’re paying rent, you get to live there for the duration of it, and at the end you own nothing.
If we’re going to compare it with food, it’s like cooking your own food vs. going out to eat. If you cook on your own, you’ll need to pay a bit more upfront for the equipment, but you own that equipment until it breaks and can make food for much cheaper from then on. If you go out to eat every day, at the end you’re left with nothing.
Except the interest part of the mortgage payment is equivalent to rent, and the principle part is paying down the loan.
Mortgage payments are often much higher than rent payments for an equivalent property.
Whether it’s a better deal to buy or rent depends on a number of factors and isn’t as cut and dry as the op suggests.
Except the interest part of the mortgage payment is equivalent to rent,
That’s plainly not true. The interest is not equivalent to rent, it’s a combination of:
Risk the bank is exposed to
Time value of money
Some additional overhead/rent the bank is charging to make a profit
You’re arguably correct only on that third point. However, as a homeowner pays off their mortgage, all those factors go away. The mortgage ends and then they own it forever, the bank doesn’t continue to make money off of this arrangement. That’s just never the case when renting.
Whether it’s a better deal to buy or rent depends on a number of factors and isn’t as cut and dry as the op suggests.
For renting to be a better deal rent would need to basically only cover operational expenditure for the property. Literally a single cent more than that and the owner of the property is getting money just for owning land and the property on it.
In every capitalist country in the world the ruling class is organized to ensure its continued ability to appropriate surplus value and leech off labor. I assure you any transient condition that is presently causing the profits of real estate speculators to falter is going to pale in comparison to the massive amount of profit they are set to make over the next decades. It’s no different than the temporary valley in 2008 which was only an opportunity for capitalists to move money into the real estate market.
Is it better to pay mortgage interest to a bank?
Hmm… Endlessly give money to someone and own nothing in the end while paying for someone else’s loan, or repaying a loan over something you own and not have to pay once you’re done. I wonder which one is best.
Generally yes, because you are also building up equity that way. Renting is just money wasted down the drain.
It’s not wasted. You get somewhere to live for the month for the rent. It’s like saying all food I buy is wasted money because I’ll just be hungry again next month.
If you’re paying a mortgage, you get to live there for the duration of it, and then you get to own the place at the end.
If you’re paying rent, you get to live there for the duration of it, and at the end you own nothing.
If we’re going to compare it with food, it’s like cooking your own food vs. going out to eat. If you cook on your own, you’ll need to pay a bit more upfront for the equipment, but you own that equipment until it breaks and can make food for much cheaper from then on. If you go out to eat every day, at the end you’re left with nothing.
Except the interest part of the mortgage payment is equivalent to rent, and the principle part is paying down the loan. Mortgage payments are often much higher than rent payments for an equivalent property. Whether it’s a better deal to buy or rent depends on a number of factors and isn’t as cut and dry as the op suggests.
That’s plainly not true. The interest is not equivalent to rent, it’s a combination of:
You’re arguably correct only on that third point. However, as a homeowner pays off their mortgage, all those factors go away. The mortgage ends and then they own it forever, the bank doesn’t continue to make money off of this arrangement. That’s just never the case when renting.
For renting to be a better deal rent would need to basically only cover operational expenditure for the property. Literally a single cent more than that and the owner of the property is getting money just for owning land and the property on it.
ok boomer. Houses are not appreciating any more. The Ponzi scheme reached it’s limit in 2022.
In every capitalist country in the world the ruling class is organized to ensure its continued ability to appropriate surplus value and leech off labor. I assure you any transient condition that is presently causing the profits of real estate speculators to falter is going to pale in comparison to the massive amount of profit they are set to make over the next decades. It’s no different than the temporary valley in 2008 which was only an opportunity for capitalists to move money into the real estate market.