Buying a home is a great achievement. While it may sometimes seem challenging, the many benefits that come with owning your own home make it all worthwhile.
In the short term, renting may seem like the best option, but here are five good reasons that owning your own home can create real value for you over time.
1. You'll build equity
Your equity is the amount of the value of the property that you own. It grows when the market value of your home increases (or when you make extra payments on your mortgage). If you already own a home, learn how to calculate your equity here.
When you own your home you can potentially leverage your home equity and access it by redrawing on your loan, or borrowing on top of your equity with an additional advance or with mortgage refinancing. These funds can then be used for a variety of things from renovating your property to buying a new car or even to go on a special holiday.
2. You'll have living security
While renting, your family's stability is based on the decisions of a landlord, who may suddenly decide they no longer want to rent their property out. Moving house is expensive, inconvenient and it can be pretty emotional, especially if you have to shift unexpectedly. When you own your own home, you can sleep sound in the knowledge that you call the shots. That's priceless.
3. You can create your dream home
Landlords aren’t usually happy for tenants to renovate their property, even if you think you'd be improving it. When you own your own home, you have complete creative freedom – you can decide to completely renovate the bathroom in a jungle theme or paint the walls in super bright colours without worrying. Home improvements generally increase the value of a property, so if it is your place, when you sell every dollar that your home has gained in value (thanks to your hard work) will be money in your own pocket! If you want some fun working out where you'd start, take our quiz to discover your home decorating style.
4. You have more control over costs
When you’re renting, your landlord can decide to increase your rent, leaving you with little choice but to accept it or get hit with moving costs. While home ownership comes with different expenses, like mortgage repayments and rates, these aren’t likely to rise by large amounts unexpectedly. In some instances you may even be able to control them, by choosing a fixed-rate home loan, for example.
5. Your mortgage repayments are a way of saving money
While it might not always feel like it, your mortgage repayments are a way of saving money. Most repayments include principal as well as interest, which means you’re putting some money towards owning more of your home. While renting seems to be cheaper, you won’t get any of that value back in the future.
When you're deciding whether to continue renting or to buy a home, there's a lot to weigh up. Speaking to a financial adviser can be a great way to help you work out the best way to meet your financial goals. If you decide that buying a home is the best choice for you, contact a Pepper Money Lending Specialist to discuss your home loan options on 13 73 77 or speak to an accredited Pepper Money Broker. They're there to help.
Alternatively, you can get an indicative pre-approval of your current borrowing power here in just minutes.