Why Preet Banerjee is choosing renting over buying
As house prices go up and incomes stagnate, renting is become more attractive.
One of the culprits? Low interest rates. They affect buyers and renters in different ways. As a buyer, every $1,000 a month might have qualified you for $150,000 in mortgage principal at 7 per cent. At 3 per cent mortgage rates, all of a sudden your $1,000 per month can get you roughly $200,000. That`s a 33 per cent increase in what you can afford to buy - all because of a change in interest rates. But as a renter, your $1,000 monthly allotment to rent doesn`t rise or fall based on interest rates.
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