Renting vs buying: which one is right for you?
Choosing whether you should rent or buy a home is a big decision that's different for everyone, as one lifestyle could be more suited to you than the other.
What are the differences between owning a home and renting?
Whether you’re paying a mortgage lender or a landlord, you’re mainly paying them so you can live in a house that you love.
However, even though mortgage payments are often similar to the cost of rent, both options have their advantages and disadvantages when it comes to what you can do with that property.
To help you decide whether you should rent or buy a home, we've listed some of the main changes you'll experience when you become a homeowner.
You’ll have to make your own repairs and upgrades
When you own your home, you need to take care of repairs and upgrades yourself. You’ll need to pay for them out of your own pocket, but you have control over who does the repairs so you can make sure they’re carried through and to a standard that you’re happy with.
This can be a relief to some as, when you rent a home, your landlord might not see the repair as being as important as you see it and repairs might not be carried out to your standard.
You can decorate your home however you like
The potential to really transform a place into your dream property is one of the biggest advantages of buying a home, especially when compared to renting. When you own your own home, you can do whatever you want with it. You can paint your own walls, put up shelves and frames, even change the carpet or flooring. It's your choice to renovate as much or as little as you’d like, even take down walls if it’s safe to do so.
In fact, many people purchase their own property not because they love it exactly as it is, but because they see the potential in it.
This is a big change from how restrictive some landlords can be when it comes to making changes to the property. Many landlords won’t let you paint walls, put up wallpaper, or even hang pictures or shelves, making it difficult to see your house as a home.
For me it's all about being able to decorate and create a home that I love. Plus I've had enough of paying off someone else's mortgage instead of my own!
Frankie, Digital Content Lead at OneFamily
You can get a pet (if you like!)
When you own your own home, you are free to have your pets with you. This makes homeownership a great option for animal lovers as it can be hard to find landlords that accept pets, especially larger pets like a cat or a dog.
I’ve always grown up with dogs and they've always been a big source of happiness for me. Since moving out many years ago and living in rental properties, I haven’t been able to get my own dog due to restrictive landlords. Recently I've started putting some money aside for a mortgage deposit so sometime in the future I can have a home of my own where I can have a dog – maybe even two!
Ines, Digital Content Executive at OneFamily
You can’t be told to move or have your rent raised
Stability is big advantage of buying a home when compared to renting. As long as you’re keeping up with payments, you can’t be asked to leave your home and, if you’ve agreed a fixed interest rate with your mortgage lender, your monthly payments can’t go up either.
I've always valued security and freedom that comes with ownership above all else and never liked the idea of renting. So when my then landlord decided to sell up and leave the country, it seemed like a good deal and I bought the very same place.
Milda, Compliance Advice Manager at OneFamily
You can rent out your home
One of the benefits of buying a home is that you can use it as a source of income. Whether you just have a spare room in your home or you’ve decided you don’t want to be there for a while, you can rent your home to someone else, as long as you check with your mortgage lender first. This could mean using something like AirBnB to make some extra income while you’re on holiday, moving to a smaller rented property while renting out your own home or even having someone move into a spare room while paying you rent.
Bear in mind that if someone is in your home and paying you rent, your mortgage payments might change and this may also count as income so you might need to pay tax on it.
You can have someone move in with you
If a family member or friend needs a place to stay or your relationship is moving to the next stage, you can have someone move in with you when you own your own home, without the need for contract renewals or new tenancy agreements. Your mortgage payments might change if they’re paying you rent, but you could ask them to help you with household costs like bills instead.
It’s worth considering that if the person who moves in with you decides to help you with your mortgage payments, they might have a claim to your property later on and they could even force you to sell it if they want their money back.
If you're thinking of having a partner move into a property you own, it's a good idea to seek advice from a solicitor or even get a cohabitation agreement drawn up to protect you in case things don't work out.
You’ll be paying to own an asset that can increase in value over time
One of the biggest advantages of buying a home is that your monthly payments will go towards owning a valuable asset. The home you that you buy is also likely to increase in value over time, meaning it can sell for more money later on, so the earlier you can buy your first home, the better. This is what is meant by “getting on the property ladder”.
This is a big change to paying rent where you’re not paying towards owning anything, in fact you might be helping your landlord pay their own mortgage!
Some things to consider
Buying a home is a big decision, and while there are a lot of advantages, there are a few things you should consider before making your choice.
What are the costs of buying a home?
When deciding whether you should rent or buy a home, it's worth keeping in mind that there are a few more upfront costs to buying than there are to renting. This makes sense, as you don’t own anything when you’re renting, and a home is a valuable asset.
Is a mortgage cheaper than rent?
Monthly mortgage payments and rental costs are currently fairly similar, so if you can afford to rent it’s likely you’ll be able to afford a mortgage.
Even if you’re not saving much money by buying your own property as opposed to renting, you’ll be reducing your mortgage each month, rather than helping your landlord pay off their own mortgage.
This means that, at the end of your mortgage term, you’ll fully own your home and won’t have to make any monthly payments to your lender anymore.
My mortgage is significantly lower than what I was being charged in rent and I have the freedom do what I want to my own home.
Victoria, Technical Analyst at OneFamily
How can I save for a mortgage while renting?
Even if you can already afford monthly mortgage payments, your main challenge will be saving up for a mortgage deposit.
But there are some shortcuts to saving for a mortgage deposit while renting.
A good option to start you off on your homebuying journey is by using a lifetime ISA to save for your deposit. You can put up to £4,000 a year into a lifetime ISA and the government will give you an extra 25% bonus on everything you put away. However, if you take your money out for anything other than to buy your first home or before you turn 60, you’ll have to pay a 25% withdrawal charge and you could lose your government bonus, along with some of the money you put in.
You can find out more about the options that are available for first-time buyers here: How to save for your first home.
Most importantly: get started
Got £25 in your current account? If you put it in a lifetime ISA now you'll be taking your first big step towards owning your own home. OneFamily's Lifetime ISA is a stocks and shares product, which means your money is invested in the stock market. While there is good potential for it to therefore grow in the long-term, there is a risk you could lose money.
Not yet sure if now’s the time? Sign up to receive our lifetime ISA guide by email using the form on this page to find out more about this savings shortcut.
Enter your details to get a free email guide to Lifetime ISAs
Enter your details to get a free email guide to Lifetime ISAs
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