In many cases in our market, you can actually buy a property for less money on a monthly basis than it costs to rent. It seems too good to be true, but the math checks out. Here’s why.
Even though prices have gone up steadily over the last five years, the key question is how much it costs to borrow money from a mortgage lender to buy a home. At 4% interest—the prevailing rate we see right now—the principal and interest payment for a $100,000 loan is only $477 a month. It would be just under $1,200 a month for a $250,000 loan, before taking into consideration any association fees or ‘assessments’ if you buy a condominium, as well as a county property tax bill.
Rental rates here in the Chicagoland market have been high and increasing over the last five years. If you rent now and you’re getting sick of paying your landlord’s mortgage, you really should consider buying a home. Those low interest rates are what make buying a home so affordable right now.
If you or anyone you know wants to talk about the costs of buying a home and how it compares to renting, give us a call or send us an email. We’d love to sit down with you soon!