“Should I rent or should I buy?” is something a lot of people ask themselves. Buying a house or a flat is one of the biggest financial decisions you’ll make, so it’s important to get it right. This guide will help you decide if you should look into buying a house, or if you’re better off renting.

• Mortgage vs rent?
• Can you afford to buy?
• Government help to buy a home

Mortgage vs rent?

It’s important to weigh up the pros and cons of buying a house as it’s a huge decision affecting you for a long time.

Benefits of owning

• Once you’ve paid off your mortgage, your home will be yours and you won’t have to worry about paying for somewhere to live.
• If your home increases in value, you could use the equity (its market value less the mortgage debt) to help buy a bigger home or fund a comfortable retirement.
• You can spend money improving your home and increasing its value without having to ask a landlord.
• Sometimes it can be cheaper to buy than rent.

Potential downsides of owning

• It’s a big commitment – you need to be sure you can afford what you’re taking on.
• When interest rates rise, your repayments will go up. It’s important you’re prepared for a rise.
• It might not always be easy to sell your home, depending on what’s happening in the market.
• You need to be sure you can afford maintenance costs like fixing a broken boiler or leaky roof.
• If you stretch your budget when you buy you might not have money for meals out, holidays and entertainment.
• if you’re living with someone and split up, deciding what to do with the property can be complicated and expensive.
• If the value of your home falls, you might be unable to sell if you owe more to your mortgage lender than your home is worth.
• You have less flexibility than when renting. For example, selling up and moving is more expensive as you have estate agency and legal fees to pay.
• If you’re buying a flat you might incur additional service charges which is not usually payable if you are renting.

Can you afford to buy?

The first step towards buying a property is working out whether you can afford it.

If you buy a home, you’ll have to pay for:

• deposit
• survey cost
• Stamp Duty
• removal costs
• legal costs such as solicitor’s fees
• your monthly bills – such as gas, electricity, home phone, etc.

If you can’t afford to buy

If you can’t afford the costs right now, think about Setting up a savings plan to help you reach your goal.

Government help to buy a home

If you’re on a low income, a first time buyer, a key worker, or only have small savings for a deposit, there are housing schemes available to help you buy your own home.

This article is provided by the Money Advice Service.