10 facts you need to know about mortgages

10 facts you need to know about mortgages

Are you thinking about buying a home, but you don’t have enough money and the word “mortgage” doesn’t exactly evoke the most pleasant associations? Is a mortgage as scary as many people make it out to be? Let’s find out together.

Fact No. 1. mortgages are a matter of quality of life

There is an opinion that it is cheaper to rent than to buy with a mortgage. So why do many people buy a house with a mortgage instead of renting it? The objective reality of the Russian real estate market today is that there is practically no professional rental market in the country. In the vast majority of cases, vacant apartments are rented out only temporarily, which means that tenants are completely dependent on the landlord’s circumstances. If the landlord’s circumstances change, the tenants have to urgently look for a new apartment and move out.

It also happens that landlords use flimsy pretexts to force old tenants who have renovated to move out and rent to new tenants, but at a higher price. The inability to plan for the long term is a decisive factor in favor of mortgages. And it is more a question of quality of life than financial gain.

Fact #2. mortgages are 90% more profitable than rentals

Suppose you rent a two-room apartment of 55 square meters. This apartment will cost you an average of 20,000 rubles per month rent. Over a period of 10 years, your rental costs will amount to 2 million 400 thousand rubles, assuming that the rent does not increase, which you think is unlikely.

Let’s imagine that in the same city you can buy an apartment of the same size in a ready-built brick house for 3 million 500 thousand rubles. If you take out a mortgage with a term of 10 years, a down payment of 20%, and an interest rate of 6.1% per year, you would have to pay 3,226 rubles per month.

The overpayment compared to a rental apartment is almost 10,000 rubles per month. At first, glance, buying an apartment with a mortgage looks more expensive, but with a mortgage, you pay for your own home and keep the apartment after 10 years of payments. After all, you invest money in the property. And in the case of a lease, you give away 2,400,000 euros and are left without an apartment.

It is also important to know that when you buy a mortgage, you can claim a tax deduction for each spouse. There is no tax deduction for renting.

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