I need to vent!

[sanbot]

Now if I don't go for a mortgage and rent, I have the flexibility of living wherever I want based on my wage and able to put much greater savings into my account than if I had a mortgage. I continue renting for 20+ years with enough money to enjoy my life and contribute to my savings. By the time I get old I have enough money saved up to go to a retirement village to live the rest of my life confortably.

The way I see it from someone who is completely single, no family and has no interest in having lots of investments (where would it go after I die?) - both methods get me to the same ends but one gives me a richer stress free life with more freedom to enjoy life while the other makes me more of a slave to the mortgage.

Now I understand that I could be completely narrow minded on this so I would very much appreciate someone who can enlighten me and who can give me me their point of view on why one of these ways is better:

a. Work your butt off for a mortgage at the cost of your enjoyment of life and then having to sell the house at your old age to retire to a retirement village but with good money in the bank to support you until the end.

b. Having enough financial freedom to enjoy your life as much as well as contribute strongly to your savings and then have more than enough money saved up to retire to a retirement village with more than enough money to sustain yourself until the end.

Naturally method 'a' would give me much greater 'riches' in the sense of what my state is worth but at the cost of much of my life as I have to dedicate many years to a mortgage which the investment will mostly stay in the bank anyway and doesn't impact my standard of living all that much. The other method gives me the same standard of living but with less riches in the bank but still enough to live the rest of my days confortably and not disimilar to the guy in method 'a'.

Kup, first of all, good on you for being content in singleness, its trully a blessing that not many people can take on.

Regarding you question/comment about mortgage vs rent. Well this is the way I see. Whilst yes you are correct in that if you get a mortgage you will spend years paying that off. But at the same time if you plan to rent for the rest of your life, you're effectively paying for someone elses mortgage.

So it comes down to:
* Rent - Pay someone elses mortgage and don't own your own home
* Mortgage - Pay your own and own your own home.

I would say mortgage is the much more attractive option even if you are single. Keep in mind that rent does fluctuate just as interest rates fluctuate.

I realise its very simplified, but i think you get the idea.

[kup]

Kup, first of all, good on you for being content in singleness, its trully a blessing that not many people can take on.

Regarding you question/comment about mortgage vs rent. Well this is the way I see. Whilst yes you are correct in that if you get a mortgage you will spend years paying that off. But at the same time if you plan to rent for the rest of your life, you're effectively paying for someone elses mortgage.

So it comes down to:
* Rent - Pay someone elses mortgage and don't own your own home
* Mortgage - Pay your own and own your own home.

I would say mortgage is the much more attractive option even if you are single. Keep in mind that rent does fluctuate just as interest rates fluctuate.

I realise its very simplified, but i think you get the idea.

Thanks for your views.

I understand that rent means paying someone else's mortgage but it also allows me more money to live as the rent is always much lower than a mortgage. I am not materialistic so I don't care about having properties or anything of the sort as long as I am happy and with enough money to enjoy life the way I see it. I feel that given the currently over inflated property prices, getting a mortgage will impede that as for a single income it will always be the over bearing aspect of my finances limiting what I can do and more into what I can't do.

My point is that for someone who is single and does not care about having lots of investment and money in the bank, the outcome after retirement of having a mortgage and renting for life seems too close together as far as the standard of living is concerned with the exception that I haven't spend 20-30 years of my life working to pay it.

[dirge]

I understand where kup is coming from. Some people just don't want the tether of a mortgage. I used to work with a lady in her 50s who had never married or had kids, nor did she had any intention of ever doing so. She'd move around a lot, was quite content with the family she had (siblings, neices, nephews, etc), and simply found that renting gave her both the disposable income and flexibility she wanted.

[jaydisc]

Not owning a home is a stigma born in the USA and exported to Australia. Europeans do not suffer from this, but granted they have considerbly greater protections as renters.

A home is a 30 year financial investment. Depending on the climate of things and your own financial status, a lot of times it is not the best investment.

The house I rent in Melbourne costs me a bit under $1800 per month. To purchase this house would cost me double, $3600 per month in mortgage alone. Let's not forget that as a renter, I'm not concerned with rates, building insurance, renovations, maintenance or countless other expenses, of which as an owner, a mortgage is only the first.

If I can successfully put away that remaining $1800 in more lucrative investments, at say 10% per annum, and in most cases, I'm actually going to do better than a homeowner, and if I actively participate in my investments, have much greater control and ability to move with the market. Another nice thing is, that if for whatever reason I can't put away that extra $1800 this month or this year, I don't lose the roof over my head.

And there's the great freedoms that renters have that homeowners do not. Like Kup says, he can work and live any place he wants. Renters can finish up a lease, go travel the world for 6 months to 6 years, come back and not have lost anything in the process. I'm moving to QLD in 6 months. I only plan on living there about 5 years and the moving somewhere else, possibly even internationally. These would not be options with a mortgage.

Unlike Kup, I have a family, and still, I do not see the economic sense in home ownership for my situation either. That's not to say that no one should own a home. It's just pointing out that it's a lot more complex than this:

So it comes down to:
* Rent - Pay someone elses mortgage and don't own your own home
* Mortgage - Pay your own and own your own home.

[sanbot]

And there's the great freedoms that renters have that homeowners do not. Like Kup says, he can work and live any place he wants. Renters can finish up a lease, go travel the world for 6 months to 6 years, come back and not have lost anything in the process. I'm moving to QLD in 6 months. I only plan on living there about 5 years and the moving somewhere else, possibly even internationally. These would not be options with a mortgage.

It could also work the other way around. You may find yourself in the position that when you move to QLD and find that perfect place to rent, the owner may one day all of a sudden decide to sell (for whatever reason) to someone who doesn't want to rent and you'll have to move even if you don't want to.

Its happened to me before and it wasn't the most convenient of circumstances given how tight the rent market was at the time.

There are inherent advantages and disadvantages in both renting and mortgaging. What it comes down to is what best suits your situation.

[jaydisc]

It could also work the other way around. You may find yourself in the position that when you move to QLD and find that perfect place to rent, the owner may one day all of a sudden decide to sell (for whatever reason) to someone who doesn't want to rent and you'll have to move even if you don't want to.

You're 100% correct. And that's even actually happened to me twice personally.

There are inherent advantages and disadvantages in both renting and mortgaging. What it comes down to is what best suits your situation.

Perfectly put.