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Personal and Business Banking

Should You Rent or Buy?

Homebuying and Mortgages

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Should you rent or buy?

Owning a home is the "American Dream" for most of us, but many people think they can't afford to buy or own a home. Actually, renting is often as expensive as owning in the short term and more expensive over the long haul.

Owning Is an Investment

When you rent a home or apartment, your rent can be as high or higher than a mortgage payment. But, the money you pay as rent is an expense. You have nothing to show for your payments.

On the other hand, owning a home is an investment that has kept up with inflation over the years. As you make mortgage payments and the value of your property increases, your ownership (or equity) increases. You can use your equity to get money-saving home equity loans or as a down payment on your next home. Eventually, you will pay off your mortgage and own your home outright.

Owning Has Tax Advantages

Rent is generally not tax-deductible, but mortgage interest (including points) on your primary residence is. The mortgage interest deduction can significantly reduce your income taxes. (Go to or your state's Department of Revenue website for more information.)

Stable Payments

Rent typically rises each time your lease renews eating much of any annual salary increase. Your payments won't change at all with a Fixed-Rate Mortgage, and won't necessarily change for the first three to ten years with an Adjustable Rate Mortgage. As your income increases, your payments become more affordable. Property taxes and homeowners' insurance related to a home typically increase as your property value rises, but usually not as fast as rent payments.

Pride of Ownership

When you own your home, you have the freedom to change and decorate it to suit you. That's often not true when you rent. Also some home improvements can increase the value of your home so you may get a return on your improvements if and when you sell your home.

Are You Ready to Buy?

Although the benefits of ownership are compelling, there are situations where renting may be a better if not the only option at least for the time being.

  • You do not have enough money for a down payment

  • You do not have sufficient income to cover home ownership expenses such as insurance, maintenance, and utilities

  • You do not have sufficient time to maintain your property

  • Your current credit standing makes it difficult for you to qualify for a mortgage

When You Are Ready...

We can help you find the right mortgage. To learn more, visit Mortgages, call 508.263.6700 or 800.328.8797, or stop by any branch.