Rent an apartment or get a mortgage: it is more profitable

When comparing mortgages and leasing real estate material aspect usually goes by the wayside. Panelists find out which is better: to pay someone else's uncle, or becoming a slave to the bank to pay, but for his or constantly move in search of more profitable options. But if leave to appeal to sentiment and numbers, the situation becomes clearer.

Rent and mortgage at a Glance

Change in property prices and rental apartments, as well as the size of inflation for an extended period of only about, so that calculations can be predicted to be inaccurate. And yet the figures speak louder than words.

The weighted average rate on mortgage loans in April of this year, according toMortgage loans granted to resident individuals, and acquired rights requirements on mortgage housing loans in rubles The Central Bank amounted to 9.64%. According to analysts Domofond.ruAnalytical reports Domofond.ru, Rent an apartment was on average 0.7% less in March 2018 than in December 2017. However, just to be sure it will be assumed that the owner of the apartment will increase payments by 5% per year.

For the calculations we take the regional center, the city of Volgograd and the multi-million city of Saint Petersburg.

Volgograd

Mortgage

The average price of one-bedroom apartment in Volgograd, according Domofond.ru, amounts to 2,365,695 rubles. Consider the situation if you have accumulated an initial contribution of 15%, 25% and 50% of the purchase price and took a mortgage at 9.64% per annum for 10 years.

In the calculations do not take into account the additional costs of related services in the form of property insurance and the person who took the mortgage, and such compensation tax deduction.

Let's assume that property prices will rise by 5% a year, while 10 years later the apartment will cost 3.67 million rubles.

rent

The average cost of removal rate one-bedroom apartment in Volgograd - 15 845 rubles per month. If the landlord will raise the cost by about 5% per year, in 10 years, the tenant will have to give 24,556 rubles a month. In total, over the years it will pay for the accommodation 2,389,344 rubles. The difference between the cost of a mortgage with the initial contribution of 15% and the tenant may rentals rent an apartment on the projected price in 2028 for another three years and nine months.

With the average salary in Volgograd in the amount of 28 483 rubles, and payments for the lease, and mortgage seem feasible for a family with two working adults.

It should also be noted that the tenant remains unspent savings for a down payment (if any) that he can put in the bank at interest. According toInterest rates and credits and deposits structure by urgency Central Bank, the average rate on deposits for one to three years of 6.41% in 2018. For 10 years the index has repeatedly changed, but we will use this figure for the calculations. In the calculations do not take into account the capitalization.

Respectively, for 10 years, the tenant not only spend less, but earn on deposit.

Rental and storage

From the preceding paragraph it is clear how many people will be able to save up for a deposit for 10 years, if it continues to withdraw housing.

The greatest chance to save up for an apartment, and buy it without a mortgage from a man who has half the amount of the purchase price, but only if the price of real estate will not change.

After 10 years to buy an apartment he will be missed by 425 213 rubles. To the right time to have on hand the full amount, he will have to set aside each month a little more than 3.5 thousand rubles.

Five years later, on his deposit will be 1,561,491 rubles. To buy an apartment at this time, a person needs five years to postpone by 13.4 thousand per month. Together with the cost of rent for housing it will leave 29.3 thousand in the first year and 32.6 thousand - in the fifth. Accordingly, if he buys an apartment in five years, the total costs, taking into account the rental leave 3,415,482 rubles, ten - 4,755,039 rubles. Both options are more expensive than the mortgage.

St. Petersburg

Mortgage

The average price for two-bedroom apartment in St. Petersburg is 6,797,671 rubles.

Not to overpay on your mortgage, or you need to accumulate a down payment of at least half the cost of an apartment, or increase the monthly payment and reduce the loan term. With an average salaryOffice of the Federal State Statistics Service for the city of Saint-Petersburg and Leningrad region 58.5 thousand rubles to make it clearly can not everyone.

After 10 years, the apartment will presumably cost 10.99 million rubles.

rent

The average cost of removal rate one-bedroom apartment in St. Petersburg - 32 744 rubles per month. With the growth of the cost of rent by 5% per year over 10 years, the monthly payment will be 50 787 rubles, and all the employer will give 4,942,178 rubles. The difference between the cost of a mortgage with a down payment of 15% on the hiring of the tenant can rent an apartment on the projected price 2028 another eight years and three months.

Not be discounted and accumulation.

Rental and storage

And buying an apartment again person can expect without a mortgage, which already has half of its price. But to meet the five-year period it will be problematic. Five years later, on his account will be 4,448,162 rubles. To collect the required amount, every month he has to postpone 39.2 thousand. In total, the cost of rent he will have to allocate 72 thousand per month in the first year.

If he buys an apartment in five years, the overall costs in view of the lease are estimated at 8,968,837 rubles, after 10 years - 11,739,849 rubles.

So what is more profitable

According to the calculations of the averaged rental profitable. In all cases, the monthly fee for rentals less than the payment on the mortgage. The initial payment is not only not spent, but also brings in money.

However, after 10 years of the selected mortgage in the property will be flat and the tenant - no.

With regard to rental housing and a simultaneous increase in savings in the apartment - the same is not so simple here. Work predictable factors: the more money you have on hand, higher income and lower costs real estate and rental in your city, the more chances to save up for an apartment without a mortgage and stay in the black. Usually, however, not taken into account in the calculations that in 10-15 years, real estate prices could rise significantly.

Therefore it is necessary to take into account another key indicator - time. Make long-term forecasts difficult even for specialists. And stability in the country - is closer to religion: you either believe in it or not. Therefore, if you save for an apartment will have more than five years, should bring to the calculations not only logic but also intuition.

Note that the money due to inflation, depreciating and real estate increases in value.

However, according to RosstatIndices of prices in the secondary housing market of the Russian Fedepatsii, The secondary market price decline in the last three years for all types of apartments except for the elite.

As an additional factor worth considering the proximity of the retirement age. On pension payments to rent an apartment is difficult, and in large cities - it is impossible. So by this time well to have their own homes, even if it got you with the overpayment.

The argument that the money gone to the bank, could be to rent an apartment until the end of life is consistent, if you give up home buying in a big city and rent an apartment for a very reasonable price. For example, if you save on overpayment of 3 million, it will give you 25 grand a year every month for 10 years (but it is necessary to take into account inflation).

Money also can be put on deposit. The sum of 3 million, taking into account the current average rates on deposits will bring 15 thousand rubles a month per cent, 4 million - 20 thousand.

How do I calculate that it is cheaper for you

Averaged calculations give the averaged results, therefore, to understand that it is cheaper for you will have to perform calculations independently. To do this, you need the following data:

1. The value of the rent for the apartment.
2. The size of your savings that you want to use as a down payment.
3. The cost of the apartment, you want to buy.
4. The interest rate on the mortgage (it is possible to use the national average or that which is offered by the bank in which you would like to take a mortgage).
5. Interest on deposit in the bank, to which you are willing to entrust your money for a longer period.

If you're choosing between a mortgage and rental property with simultaneous accumulation of money to buy an apartment

1. Mortgage

Through mortgage calculator or on the website of the bank, calculate how many years it will take you a mortgage at an optimum monthly payments, what will be the overpayment.

With the price of the apartment at 5.2 million rubles, an initial payment of 3.2 million, an interest rate of 11% and the term of the mortgage in seven years, the monthly payment will be 34 245 rubles, and the overpayment - 876 569 rubles.

2. Rent apartment

Count how many over the years will give you an apartment for rent, taking into account possible increases in fees.

For example, you give a monthly basis 22 thousand rubles, and rent an apartment for three years. During this time, the price never rose, but it is obvious that after seven years of rent will not cost as much. Therefore, in the coming year you presumably will give for the hiring of 22 × 12 = 264 000, in the next three years - 24 × 36 = 864 000, in the remaining three - 26 × 36 = 936 000, total - 2.06 million rubles.

3. Deposit and accumulation

Calculate how much money will accumulate on your deposit for the term of the mortgage, and the amount of vote. Then calculate how much money you will have after the first year, the second and so on until the end of the term of the mortgage. Also decide on the amount you can set aside each month to buy an apartment, calculate how much money it will give you a year, two, and so on until the end of the term of the mortgage. Now, by adding some simple sums on deposit and savings find out how many years you will be able to raise money on the property.

On deposit without capitalization rate of 6.1% in the sum of 3.2 million rubles in seven years it will turn to 4,566,400 rubles.

Even if property prices will rise, then to buy an apartment without a mortgage can not be seven years.

There is an option not wait to accumulate the required deposit amount and deposit of 20 thousand rubles per month, or 240 thousand per year. Then, after five years in savings will be 5.376 million rubles. Taking into account all of the rent on the property will leave 6.64 million rubles and 176 000 will remain. In the seven years of the mortgage for the apartment will leave 6.8 million. Ie cost goes about the same, but spared two years, that is to rent housing and at this time to save more profitable.

These calculations work only if the cost of apartments has not changed in five years, and the rent is going up in price faster than laid down in the forecast.

When an apartment is not possible to save even beyond the term of the mortgage, it is obvious that borrow from the bank is more profitable than to save.

If you're choosing between a mortgage and rental property with no plans to buy an apartment in the future

1. Remember how much you give landlord

Take the numbers from the previous example - 22 thousand rubles.

2. Calculate the monthly payment on a mortgage

Again, the numbers from the previous example - 34.3 thousand rubles.

3. Compare the two numbers

It is obvious that making profitable, even if not to take into account in the calculation of the initial payment. If everything is not so clear, divide the amount of the initial payment on the mortgage, and the number of months add to the amount received monthly payment:

3 200 000 ÷ 84 = 38;
34.3 + 38 = 72.3 thousand rubles.

Compared with 22 thousand get more clearer. And even if after seven years of rent will rise in price twice, rent an apartment will still be profitable.

However, on the eighth year of a person with a mortgage completely extinguish it and will pay only for utilities. A tenant will continue to give the same amount of the hiring. On the other hand, if the payment for an apartment will not be raised, the amount that would have gone for a mortgage, it will be enough for 26 years of the lease.

4. Calculate how much you will earn on the money that could have gone for a down payment

After seven years there will be 4.57 million rubles on deposit. And if you set aside each month the difference between payments in the amount of 12.3 thousand per month, in the seven years it will bring more 1.03 million. A total amount of 5.6 million, the provisions under 6.1% per annum, will generate 28.5 thousand rubles per month interest.

see also

• How to sell an apartment: a detailed instruction →
• What to check before you buy an apartment in the secondary market →
• How fast to rent an apartment for rent: step by step guide →