First and mostly, piece of mind, independence, and security. Financially, buying a home is saving all the rent, as well as owning an asset that most likely appreciates though time. Also, buying a home forms a financial warranty. This warranty helps when you need to borrow in the future.
For 20 years, the yearly rent gradually increases while the yearly installments remain the same.
Yearly rental is considered as 8% of home value. Home Finance Rate: 5.25% for a period of 20 years. Average yearly increase in rent is considered as 2.83%.The figures used are approximate.
Buying a home is indeed a commitment for a long period, but it is a long-term saving, like the retirement or the children education plans, that can last for around 20 years. At the end of the finance, the reward is significant, and the feeling is indescribable when the home is completely yours!
On the other side, renting, which is also a long-term commitment, never ends and you have to pay it your whole life!
Remark: The total profit of the finance is not divided equally over the monthly installments. The profits in the first few years are higher than the ones in the last few years.
For a home price of SR 500,000, your monthly installment to buy is SR 550 less than your average rental. And after 20 years, the home is yours!
Yearly rental is considered as 8% of home value. Home Finance Rate: 4.25% yearly. Average yearly increase in rent is considered as 2.83%.The figures used are approximate.
For a home price of SR 500,000, and with a down payment of SR 50,000 (10% of home price), your monthly installment to buy is SR 5,200 less than your average monthly rent . And after 30 years, the home is yours!
Yearly rental is considered as 8% of home value and average yearly increase in rent is considered as 2.83%. Home Finance Rate: 3.25% yearly for 30 years. The rate is fixed for first 5 years, and then reviewed every 3 years. However, the change in the rate is not considerable for this comparison. The figures used are approximate.
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