In the rent versus buy debate there is no clear winner. The important thing is to choose what’s right for you
In the short term at least, renting can be easier than owning your home. You don’t need to worry about maintenance or repairs, you’re free to move on once the lease expires and it’s often cheaper to rent especially if you share with a few mates. The trouble is, if one of your flatmates pulls stumps you could be lumbered with their share of the rent. You’re also likely to be living with some pretty restrictive lease conditions – like regular property inspections, rent hikes once or twice a year, and you could have limited opportunities to stamp your personality on the place.
Nonetheless if you want to be able to move around at will or you’re just not ready for a major financial commitment, renting can tick plenty of boxes.
Buying is sensible…when you’re ready
Despite the potential freedom of renting, the time often comes when we start to think about buying a place of our own. With interest rates currently at record lows, there is certainly a good incentive to think about getting into the market now. Nonetheless the prospect of buying property and learning to live with a home loan can be daunting, and you need to be sure it’s the right decision for you.
If you’re unsure about which way to go – rent or buy, the new ‘Building Financial Confidence’ website from ME Bank offers some useful tips, and offers an unbiased view of the pros and cons of renting and buying. You can find it at http://bfc.mebank.com.au, just click on ‘Starting out in Life’.
Save with lower borrowing costs
When you’re ready to buy, one of the best ways to streamline the transition from tenant to home owner is by keeping a lid on borrowing costs. A sensible starting point here is to save a reasonable deposit. A simple way to fast track your deposit is with a savings account tailored to the needs of first home buyers – like ME Bank’s First Home Saver account*.
With a First Home Saver your money earns a healthy rate, and unlike regular savings accounts the returns are lightly taxed. The main drawcard is a free government contribution to your account – worth 17% p.a. of your deposits up to $6,000 annually. It’s a valuable helping hand that you certainly don’t get with other savings accounts.
Look for all-round value
Your choice of home loan matters too. It pays to focus on overall value because while one-off perks like discounts on upfront fees can be tempting, they could mask an uncompetitive rate. A consistently competitive interest rate and flexible features will work together to trim your borrowing costs and make the loan easier to live with. Right now ME Bank is offering eligible super fund and union members a 3-year fixed rate of 4.69% p.a. (comparison rate 5.22% p.a.)^ on its standard home loan.
To find out more about home loans to help first home buyers, call ME Bank on 13 15 63 or visit mebank.com.au.
Interest rates are current as at 26/09/2013 and are subject to change. Terms, conditions, fees and charges apply. Applications for credit are subject approval. Applications for credit are subject to approval. *The First Home Saver Account is subject to Government eligibility and withdrawal criteria. ^Comparison rate based on a loan of $150,000 for a term of 25 years.WARNING: This comparison rate is true only for the examples given and may not include all fees and charges. Different terms, fees or other loan amounts might result in a different comparison rate. This information does not take into account your situation and you should consider if a First Home Saver Account is appropriate for you with the Product Disclosure Statement and Terms and Conditions available from Members Equity Bank Pty Ltd ABN 56 070 887 679 AFSL and Australian Credit Licence: 229500.
Brought to you by ME Bank. Visit http://www.mebank.com.au
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