Is it better to buy or rent?

Contrary to what one might think, financing one’s home is a god way to protect oneself financially in the event of difficult economic conditions.

This is because, if you chose to finance your house with a fixed rate loan, any increases in the cost of living will not affect your repayments, while your income will rise.

If we assume an inflation rate of 3% per year and an increase in income of 1% per year, after only five years, the burden of your loan which initially represented 33% of your income would only represent 27% of your income

In fact, the higher the rate of inflation, the more this burden risks to diminish. On the other hand, if you rent your house or apartment, the rent will be indexed and will increase each year with the increase in cost of living.

Another important advantage is that the value of the house, which you have purchased and financed, will continue to rise.

If, for example, you sell your property after ten years, and we assume very conservatively that its value has increased 3% per year, a property that initially cost you €400,000.00 could be resold for more than €521,909.00, in other words a capital gain of €120,000.00. On the other hand, if you continued to pay rent for ten years, it is very unlikely that your landlord would give to a gift voucher of €120,000.00 at the end of your lease.

Good news! Several estate agents have confirmed that “TEAM construct houses sell very well”.