Buying a home vs. Renting: Which is better?

Buying your home is one of the biggest financial decisions of your life. However, it is a big commitment and there are a lot of hidden costs and factors that can make it unaffordable for some. Because of the costliness of buying a home outright, many buyers turn to renting instead, especially in expensive housing markets like London, New York, and Hong Kong. Determining which option is best for you depends on a variety of factors, and not everyone’s situation is alike. To help with this important decision, let’s take a look at some of the key differences between buying and renting.


When buying a house, it’s likely you’ll need to apply for a mortgage. To get a mortgage, you need a deposit (usually at least 10% of the home’s value) and a steady income in order to make repayments. The greater your deposit and income, the more your bank or lender will be able to offer you. However, if you live in an expensive area, or have a low salary and little savings, buying may not be for you. This is why the first step in buying a house is to make sure you can buy.

Once you are sure that buying is a viable option for you, it’s important to factor in the additional costs that come with buying a house to make sure it makes financial sense when compared to renting. The cost of owning a house is much more than just mortgage repayments and a deposit. There is a lot of legal paperwork involved, which often result in thousands of euro in legal fees. In addition to legal fees, most countries charge a tax when you buy, in Ireland this tax is 1% of the property’s value, and 2% if the selling price is over €1,000,000. There is also the expenses that come with actually owning and maintaining a home, like making repairs that would be covered by your landlord if renting.


If you can’t afford to buy, whether it’s due to prices in the area, your income, or any other factor, you may still be able to rent. This is because rental security deposits are much much smaller than mortgage deposits. You also are not locked into one place, so if you feel a sudden urge to move or are relocated due to your job, it is a much easier process than if you owned a house.

However, a downside to renting a house is that your landlord can raise prices, take your deposit over minimal damage, or even kick you out, and depending on the laws where you live, there might not be anything you can do about it. The biggest con of renting is that it’s not your place. Your landlord may have rules on things like pets and what you can and can’t hang on the walls, so it may be difficult to truly feel like you’re at home.

At the end of the day, whether you are buying or renting depends on your specific situation. If you are planning to live somewhere long-term, have a lot of savings and a good salary, you should be looking to buy a house. If you are living paycheck to paycheck, or live a flexible lifestyle and may be looking to move sometime soon, renting is probably your best bet for now.

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