Rent vs Buy

By October 7, 2015Uncategorized

At CMFG, we firmly believe in employing your capital to work for you, and we will walk you through why buying will positively impact your future.


No matter where you live, housing payments are a necessity. However, you have control over where those payments go. When renting, you are paying for your landlord’s mortgage, thus adding equity to their bank account. Conversely, when you own, you are increasing the degree of ownership in your home with every payment, thus building your net worth. The difference between renting and buying is money flowing out of your hands, or staying with you.

There are numerous benefits associated with building up your equity. Most have heard the argument for purchasing due to the potential of increasing home values. Ownership in real estate increases personal net worth, which improves your borrowing potential and allows for access to more credit, such as borrowing against the equity of your home and increased lines of credit.  In addition, once the equity in the home grows to a certain amount you will be able to borrow against your equity in the home. This can be invaluable in situations where you require capital, such as for medical emergencies, consolidating large debts, renovations, purchase of another property, child’s education or starting a business. The leverage you can gain from your property is unlike any other investment, as no other investment can be leveraged with as much as real estate.


The Bank of Canada has cut overnight rates twice thus far in 2015, from 1.0% to 0.5%, which means borrowing costs are reduced. Given the reduced cost of purchasing on borrowed capital, combined with strong housing numbers and market trends, home buying is an excellent investment at this time.  Real Estate is a safe and stable investment in which you have control over your capital.


The freedom of owning and having a place which you call home can be incredibly liberating, for reasons ranging from greater convenience, having more space for your family or possessions, or obtaining creative control over your home. As the walls now belong to you, you can put up whatever pictures you wish, paint the walls your favorite color, or add the additional rooms you want. You will also gain control over maintenance choices unless living in a condominium or homeowners association controlled property.


There are a variety of other benefits that come with home buying. For those who are struggling with credit, expenses, a history of on-time mortgage payments can help to rebuild credit. Stability of mortgage payments can aid in long-term budgeting as you do not have to account for the uncertainty in fluctuation of rent. The ability to leverage capital into an asset worth many times initial capital provides an ability to realize returns rarely encountered in other forms of investment while avoiding the significant risks associated with speculative securities.

At CMFG, we can help you obtain the lending you require for your financing needs. Please call us at (647) 494-9885 ext. 101, email or with any questions or further inquiries.