Financial Benefits to Owning Your Home versus Renting

Posted on Mark Argentino
18.07.2008
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Financial Benefits to owning your home

We all know the old adage about nothing being certain except death and taxes. However, on a more positive note, you can also be certain of tax benefits if, that is, you are a homeowner. If you have read this, and you are located in Canada and you don’t know how to do this, send me a quick email with SM in the subject and I will send you details.

Purchasing a home can provide valuable tax savings to homebuyers in Canada if you know how to do it.

Another financial advantage to owning a home is that as you begin to pay off your mortgage loan, you build equity in your property. In other words, the value of your home can increase as your total mortgage amount decreases over time.

For those who rent, the tax savings of ownership go to the landlord, not to the tenants. Wouldn’t you rather build equity for yourself every month instead of paying someone else and giving away “your” tax savings?

Additional Advantages of Homeownership

Scheduled Savings: When you are a homeowner, your monthly mortgage payments serve as a type of savings plan. Over time you will accumulate what lenders call “equity,” an ownership interest in your house that you may be able to borrow against or convert to cash by selling the house.

Stable Housing Costs: While rents typically increase year after year, the principal and interest portion of most mortgage payments remains unchanged for the entire repayment period. Because of the effect of inflation, you pay the same amount with ever “cheaper” dollars.

Increased Value: Houses typically increase in value over time. It’s not unusual for a house that sold fifteen years ago to be valued at much more than its selling price today. This increased value is as good as money in the bank to the homeowner.

Read more about if you should rent or own