Borrowing Cheaper Than Renting

High rental prices encourage home purchases with a loan, despite the fact that apartment sale prices continue to be on an upward trend. In one area, the monthly loan payment for an equivalent apartment can be even up to 200 euros lower than the rental price.

Prices are growing rapidly in every sector. But likewise, people's incomes have continuously increased. More favorable bank margins compared to the general growth have become a good alternative for many to buy their own home instead of renting, as it is seen that it makes more sense to pay for one's own home already.

Up to 200 euros in savings

Although much depends on the details, such as the size of the own funds and the loan purpose (whether a home or capital loan), as a broad example, one can cite an apartment in a new development costing 100,000 euros, whose monthly loan payment under typical conditions is approximately 300-350 euros. A similar apartment on the rental market can be obtained for a minimum of 500 euros per month.

High demand for rental apartments is a persistent trend in the longer term, which means that their price levels will remain high in the future as well. Additionally, the actions of the European Central Bank in keeping interest rates low and increasing inflation are also measures that favor borrowing.

Of course, this does not mean that renting is somehow less popular or a wasteful way to spend money. On the contrary – renting as a lifestyle or pragmatic choice is still relevant and the only option for many. We also recommend that before making a loan decision, you carefully consider everything and avoid living beyond your means.

Article source: Uus Maa Real Estate Bureau