Owning your home rather than renting one will save you £194,000 over 50 years, according to research from Barclays.
The total cost of mortgage repayments, maintenance and other costs associated with owning the average home would come to £429,000 over 50 years, whereas renting the average home for the same period would cost £623,000.
Initially, being a tenant is often cheaper than being an owner, as mortgage repayments tend to be higher than rental costs, but rents inflate over time. Obviously, a homeowner has to get over the initial hurdle of purchasing a home with the expenses of saving for a deposit, stamp duty and solicitor’s fees but by the end of the period they will own the property outright.
"The cost of stepping on or moving up the housing ladder can be a big barrier for many, but the long-term benefits hugely exceed the initial expense," says Andy Gray, head of mortgages at Barclays.
"Not only will you save money by becoming an owner occupier, but you will also own a substantial asset once your mortgage is paid off, providing financial security for your old age. Those who choose to rent permanently will have to pay their landlord out of their pension income, while owner-occupiers will enjoy minimal housing costs."
Over a 50-year span, roughly 50% of the cost of owning your own home is made up of mortgage payments - £210,000 out of the £429,000. Two-fifths of that £210,000 is interest cost, while the rest is capital repayment.
The next largest expense is maintenance at £170,000, then the initial purchase deposit, followed by insurance, stamp duty and the other costs associated with the initial purchase make up the rest of the expense.
The savings vary around the country depending on rent and house prices but owning always comes out on top.
|HOUSE PRICES||YEAR ONE RENT||LIFETIME CASH FROM OWNING OVER RENTING|
|England & Wales||£160,780||£8,361||£194,341|
|Yorkshire & The Humber||£118,204||£7,801||£280,125|