Should you buy or stay on rent

Apartment prices are going up and interest rates too alongside. The big question for people trying to buy a dream home with rising EMIs these days is : Should one buy a flat or does it make more sense to live on rent and wait for better days to make a purchase?

In most cases, it's better to buy a home than to rent: Renting is better only if your rent is very low, or if you plan on moving in a few years.

However, it is not true in some cases. Sometimes it takes at least a few years for buying to become a better deal, than renting, as there are some big up-front costs with buying, and your monthly payments from buying are generally higher. However, those payments are building equity in your home — you're 'keeping' some of what you're paying. Also, while you're making your payments, your home generally appreciates in value. After a few years, the equity you've paid into your home plus the appreciation will overcome the extra money you had to pay to get into the place.

Cash Spent: This is how much it costs you to either buy your home or to rent. For buying, it includes your down payment, your monthly payments, taxes, insurance, maintenance, and any other expenses. For renting, it includes just rent. You'll almost always pay more to buy a home than to rent. What makes buying a better deal is that you build equity in your home.

Paid Equity And Appreciation: 'Equity' is the amount of your home that you own. There are two kinds of equity - paid equity and appreciation. Paid equity is the portion of your loan payments that actually paid down the loan, ie, it's the non-interest portion of your loan payments. Once you've made all your payments, this amount will equal the original purchase price of the home. Appreciation is how your house increases in value over time just by sitting there. So even though it usually costs more to buy than to rent, your costs are offset by this value you have in your home.

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