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The Impact of Including Rental Payments in Credit Scores

The Canadian government’s proposal to include rental payments in credit scores has sparked discussions about its potential benefits and challenges. Under the proposed Canadian Renters’ Bill of Rights, timely rental payments would be used to calculate individuals’ credit scores, aiming to assist renters in building financial credibility for homeownership.

Prime Minister Justin Trudeau highlighted the importance of recognizing renters’ contributions, stating that renters deserve credit for their monthly rental payments, especially when aspiring to purchase their first home. The proposed measure aims to address the disparity between renters and homeowners, where renters may feel left behind despite making substantial monthly payments towards rent.

While supporters believe that including rental payments in credit scores could help aspiring homeowners qualify for mortgages or secure lower borrowing rates, critics raise concerns about its effectiveness in addressing housing affordability and supply issues. Additionally, there are concerns about potential negative impacts on renters who struggle to make timely rent payments, potentially hurting their credit scores further.

Pankaj Aggarwal, a respected mortgage broker in Mississauga, shares insights on the proposed changes and their implications for renters and the housing market. According to Aggarwal, while including rental payments in credit scores may offer benefits for some renters, it is crucial to address underlying issues such as housing affordability and supply constraints.

Aggarwal emphasises the importance of holistic solutions to improve housing accessibility for all Canadians. While the proposed measure may assist renters in building financial credibility, Pankaj Aggarwal highlights the need for additional support mechanisms to address affordability challenges and help renters transition into homeownership. 

For many renters, homeownership aspirations are hindered by financial constraints despite diligent savings efforts. While inclusion of rental payments in credit scores may offer some benefits, fundamental changes to the housing landscape are needed to address systemic challenges. He also strongly believes that private mortgages have a very big role to play in the support that new and aspiring homeowners need.

The proposal also highlights the existing infrastructure for rent reporting in Canada, albeit on a small scale. Companies like FrontLobby and Equifax Canada already collect rental history data, allowing tenants to opt-in for inclusion in their credit reports. While rent reporting can benefit both tenants and landlords, widespread adoption and awareness remain limited.

Many mortgage brokers in Mississauga have expressed support for the government’s initiative, recognizing the importance of responsible implementation to ensure accuracy and fairness in credit assessments.

In conclusion, the inclusion of rental payments in credit scores has the potential to empower renters and level the playing field for aspiring homeowners. However, it should be part of a comprehensive approach to address housing affordability and supply issues in Canada. As discussions continue, it is essential to consider the diverse needs and challenges faced by renters across the country.

Pankaj Aggarwal, the leading mortgage broker in Mississauga, believes that no matter what the market conditions are or what government policies are at play, housing is a primary requirement and should be addressed as soon and swiftly as possible.

He also is a big proponent of private mortgage solutions as they offer greater flexibility and breathing room for even those who do not fall under any conventional gauging norms. Private mortgage industry has definitely risen to the top over the last few years following the utter chaos in the financial situation across Canada.

Building Equity Through Real Estate Investment

In the pursuit of financial stability and long-term wealth accumulation, real estate investment stands out as a tried-and-true strategy. Among the various approaches to entering the market, leveraging equity through property ownership and rental income offers a particularly effective path to building substantial wealth over time. In this comprehensive guide, we explore the best way to build equity by taking a mortgage for a property with rental space and, in a few years, using the equity in that property to purchase another one, and so on. Keep in mind that if you are going to try this out in a place like Ontario then a seasoned mortgage broker in Ontario is a must as he/she can help you scan the whole province for such opportunities.

Understanding Equity Building Through Real Estate

Equity, the difference between a property’s market value and the outstanding balance on its mortgage, forms the cornerstone of real estate wealth building. As property values appreciate over time and mortgage balances decrease through regular payments, equity accumulates. Leveraging this equity allows investors to access funds for further real estate investments, compounding their wealth-building potential.

Step 1: Acquiring a Property with Rental Space

The first step in this strategy is to purchase a property with rental space. Whether it’s a multi-unit residential building, a commercial property with rental units, or a single-family home with additional dwelling units, the goal is to generate rental income that covers or exceeds expenses. With tenants in place, rental income contributes to paying down the mortgage balance while property values appreciate, laying the foundation for equity growth.

Step 2: Building Equity Over Time

As tenants pay rent and property values appreciate, equity in the initial property grows steadily. This passive wealth accumulation is bolstered by market trends and debt reduction, positioning investors for the next phase of the strategy: leveraging equity to expand their real estate portfolio.

Step 3: Tapping into Equity for Further Investment

Once sufficient equity has been built in the initial property, investors can explore options to access this wealth. Home equity loans, lines of credit, or refinancing the existing mortgage provide avenues to unlock equity and access additional funds for investment purposes.

Step 4: Acquiring Additional Properties

With funds from tapping into equity, investors can proceed to purchase another property. Whether it’s a similar rental property to diversify the portfolio or a different type of real estate asset based on investment goals, the goal remains the same: to continue generating rental income and building equity across multiple properties.

Benefits of the Equity Building Strategy
  • Long-Term Wealth Accumulation: Real estate equity serves as a reliable vehicle for long-term wealth accumulation, benefiting from both property appreciation and rental income.
  • Diversification and Risk Mitigation: Owning multiple properties diversifies investment portfolios, spreading risk across different assets and markets.
  • Passive Income Generation: Rental income from investment properties provides a consistent source of passive income, supplementing earnings and fostering financial independence.
  • Tax Advantages: Real estate investments offer various tax benefits, including deductions for mortgage interest, property taxes, and depreciation, optimising returns and improving cash flow.

In conclusion, leveraging real estate equity through strategic property ownership and rental income offers a powerful pathway to building substantial wealth over time. By acquiring properties with rental space, allowing equity to accumulate, and leveraging that equity to acquire additional properties, investors can create a sustainable and diversified real estate portfolio. With careful planning, prudent financial management, and guidance from a trusted mortgage broker in Ontario like Pankaj Aggarwal, this strategy can unlock the full potential of real estate investment and pave the way to financial freedom. Whether you’re a seasoned investor or just starting, exploring the potential of real estate equity is a smart move towards achieving your wealth-building goals.

Anticipating Lower Mortgage Rates in 2024

Mortgage Rates in 2024

As the world bids farewell to 2023, the whispers of potential changes in the Canadian mortgage scene are gaining momentum. Anticipation surrounds a potential reduction in influential interest rates by the Bank of Canada and other central banks in 2024. What does this mean for homeowners, prospective buyers, and those navigating the real estate market? Let’s delve into the insights and projections that could shape the Canadian mortgage landscape in the coming year.

Bond Yields and Mortgage Rates

Pankaj Aggarwal sheds light on the intricate dance between mortgage rates and government bond yields. The decline in mortgage costs is attributed to lower returns from government bonds, with fixed mortgage rates directly tethered to these yields. The peak in yields observed in October has since subsided, paving the way for reduced rates. Currently, rates of less than five percent are being offered for specific types of fixed mortgages, marking the lowest figures since late spring of 2023.

These reduced rates are particularly applicable to fixed five-year, insured mortgage terms that typically require a down payment of less than 20 percent. It’s akin to a late ‘Christmas present’ for borrowers, offering an opportunity for more affordable homeownership.

Affordability and Market Dynamics

Pankaj Aggarwal emphasises that while housing affordability has improved in some Canadian cities, it’s primarily due to falling house prices rather than lower rates. The reduction in rates has, however, sparked increased optimism among consumers, rekindling interest in the housing market as we step into the new year.

Many mortgage brokers caution against waiting for lower rates though. As rates dip, more buyers might enter the competition for homes, potentially driving purchase prices higher. It’s a delicate balancing act for those considering a home purchase, weighing the benefits of lower rates against potential increases in property prices.

The Economic Landscape

The Bank of Canada’s prior decision to raise interest rates aimed at combating inflation had its ripple effects, leading to higher mortgage payments for approximately 45 percent of mortgages initiated before the rate hikes. This increase in payments, coupled with the expected surge of mortgage renewals through 2026, could dampen economic activity in the short term.

However, the economic landscape is expected to rebound toward the end of 2024. Despite the turbulence faced by the Canadian housing market in 2023, experts foresee a gradual recovery as interest rates stabilise and demand returns.

In this dynamic landscape, having a trusted guide is paramount. Pankaj Aggarwal, your reliable mortgage broker, stands ready to navigate you through the twists and turns of the evolving mortgage scene in 2024. Whether you’re a first-time homebuyer, looking to renew your mortgage, or exploring private mortgage options, Pankaj Aggarwal ensures a seamless and informed journey toward homeownership.

Unlock the potential for savings in 2024 with Pankaj Aggarwal, your trusted mortgage broker. Explore the dynamics shaping Canadian mortgages and embark on a prosperous homeownership journey.

This is how strategic savings can lead to a success in Peel Region

Strategic Savings for Success with Mortgage Broker in Peel Region

In the realm of real estate, the concept of a mortgage goes beyond a simple transaction of buying a home. It’s a strategic financial decision that aligns with long-term goals, provides financial flexibility, and can be a key tool for wealth creation. Pankaj Aggarwal, your trusted mortgage broker in Mississauga, sheds light on the profound need for mortgages beyond mere affordability.

Understanding Mortgages as Financial Tools

Contrary to common belief, mortgages aren’t just about acquiring a property when you lack the funds. They serve as powerful financial tools that enable individuals to optimise their capital, manage cash flow effectively, and capitalise on potential investment opportunities. Pankaj Aggarwal emphasises the need to view mortgages as a strategic component of one’s financial portfolio.

Private Mortgages: Tailoring Solutions for Unique Needs

In the landscape of mortgage options, private mortgages stand out for their flexibility and customization. Pankaj Aggarwal navigates clients through the nuances of private mortgages, highlighting how these solutions can be tailored to unique financial situations. From self-employed individuals to those with non-traditional income sources, private mortgages offer a bespoke approach to home financing.

Beyond Affordability: The Wealth-Building Potential of Mortgages

The need for a mortgage isn’t solely determined by the lack of funds; it’s rooted in the desire for financial empowerment and wealth creation. Pankaj Aggarwal guides clients towards leveraging mortgages strategically, allowing them to allocate capital efficiently and potentially generate wealth through real estate appreciation.

Cash Flow Management: Mortgage as a Financial Safety Net

A well-structured mortgage can serve as a financial safety net, providing individuals with liquidity when needed. Pankaj Aggarwal recommends exploring mortgage options that align with cash flow objectives. This approach ensures that individuals can maintain financial stability and navigate unexpected expenses without compromising their overall financial well-being.

Investment Opportunities: Using Mortgages to Grow Wealth

Pankaj Aggarwal underscores the role of mortgages in seizing investment opportunities. Whether it’s acquiring additional properties for rental income or engaging in property development projects, a strategic mortgage approach can be a catalyst for wealth accumulation. By tapping into the potential of leveraging, individuals can multiply their investment returns over time.

Pankaj Aggarwal’s Expertise: Navigating the Mortgage Landscape

As a seasoned mortgage broker, Pankaj Aggarwal brings a wealth of expertise to clients seeking not just a mortgage but a comprehensive financial strategy. His guidance extends beyond securing favourable interest rates; it encompasses understanding the client’s financial goals and tailoring mortgage solutions that align with their unique needs and aspirations.

The Emotional Aspect: Making a House a Home

While mortgages are inherently financial instruments, Pankaj Aggarwal acknowledges the emotional aspect of homeownership. Beyond the numbers, a mortgage facilitates the realisation of a dream—the transformation of a house into a home. His personalised approach recognizes the emotional significance of this journey and aims to make it as smooth and rewarding as possible.

Financial Literacy: Empowering Clients to Make Informed Decisions

Pankaj Aggarwal places a strong emphasis on financial literacy. Through educational initiatives and transparent communication, he empowers clients to make informed decisions about their mortgages. Understanding the intricacies of mortgage terms, interest rates, and repayment structures enables individuals to navigate the mortgage landscape with confidence.

Conclusion: Elevating Your Financial Strategy with Mortgages

In conclusion, the need for a mortgage is not merely about affordability; it’s a strategic financial decision that can shape your financial future. Pankaj Aggarwal, your trusted mortgage broker, advocates for viewing mortgages as powerful tools for wealth creation, cash flow management, and strategic investment. With his expertise, clients can unlock the full potential of mortgages, transforming them from a transactional necessity into a cornerstone of their financial success.

Understanding the Different Types of Mortgages for Financial Relief

If you’re facing a financial crisis, it can be difficult to know where to turn for help. Fortunately, there are several types of mortgages that can provide relief in different situations. From business line of credit to refinance cash back, here are some of the most common types of mortgages you can use to get out of a financial jam.

Business Line of Credit

Understanding the Different Types of Mortgages for Financial Relief business line of credit

It is a type of mortgage that provides flexible access to funds for small business owners. With it you can borrow up to a certain amount and pay interest only on the amount you use. This can be a useful option for businesses that need short-term financial support, such as to cover unexpected expenses or bridge a gap in cash flow.

Startup Loans

If you’re starting a new business, a startup loan can provide the capital you need to get off the ground. Startup loans typically have more flexible requirements than other types of mortgages, as lenders understand that new businesses may not have a long track record of success. However, they may also come with higher interest rates or require collateral to secure the loan.

Business Lending

Business lending is a broad term that encompasses a wide range of mortgage options for businesses. From term loans to equipment financing, there are many different types of business lending available to suit different needs. Whether you need funds to expand your operations, purchase new equipment, or cover unexpected expenses, there is likely a business lending option that can help.

Lantern Loans

Lantern loans are a type of mortgage that is specifically designed to help people who are facing financial hardship. These loans are typically offered by nonprofit organisations or government agencies, and may come with more flexible terms or lower interest rates than traditional mortgages. Lantern loans may be a good option if you’re struggling to make ends meet and need a short-term solution to get back on track.

Refinance Cash Back

If you already own a home and have built up equity, a refinance cash back mortgage may be a good option to get some financial relief. With a refinance cash back mortgage, you can refinance your existing mortgage and receive a lump sum of cash back based on the equity in your home. This can be a useful option if you need funds for a large expense, such as home repairs or medical bills.

It’s important to note that mortgages are not one-size-fits-all solutions. The type of mortgage that is best for you will depend on your individual financial situation, as well as the specific needs you are trying to address. Before taking out any type of mortgage, it’s important to do your research and understand the terms and requirements of the loan.

Additionally, it’s important to consider the long-term implications of any mortgage you take out. While mortgages can provide short-term financial relief, they also come with long-term costs in the form of interest and fees. Before taking out a mortgage, make sure you have a clear plan for how you will pay it back and how it will fit into your overall financial picture.

There are several types of mortgages that can provide financial relief in different situations. From business line of credit to startup loans, refinance cash back, and more, there are many options to choose from. However, it’s important to carefully consider your individual financial situation and the long-term costs and implications of any mortgage before making a decision. With the right approach, a mortgage can be a valuable tool to help you get out of a financial jam and move toward a more stable financial future.

Questioning The Relevance Of Canadian Mortgage Stress Test

The Canadian Mortgage market is experiencing a roller coaster ride of epic proportions ever since the early 2020 decline of Interest Rates. Earlier this year The Royal Bank Of Canada decided to steadily raise the Interest Rates to tackle the inflation. The current Mortgage Market is buzzing with rumours of the Interest Rates being at their peak. Here we are discussing the relevancy of these Stress Tests.

How the Stress Test works

The Canadian Mortgage Stress Test requires both insured and uninsured borrowers to present proof of being able to pay monthly payments based on the rate of 5.25% or two percentage points above their contract rate, whichever is higher at the time. This has become a problem today as borrowers are being tested for rates above 6% and 7%.

Why the spike in Interest Rates

We understand that the Interest Rates were hiked to control the overpricing in the real estate market and bring about a balance to this frenzy. It had to be done to curb the rate of inflation that was not witnessed since the 1980s.

To give some credit to The Royal Bank Of Canada, the increase in Interest Rates has resulted in declining prices of properties. Still, these are tough times for common Canadians as they are still struggling to pass the Mortgage Stress Test.

Where’s the problem

The period of early 2020 to 2021 was a golden opportunity for Canadians to buy homes for themselves as the Interest Rates were at a record low but still dreams of a lot of them were shattered due to the prevailing Mortgage Stress Test. Although the actual Interest Rates were low, they still had to withstand the Mortgage Stress Test Rates which stood considerably high at 5.25%. This was the story of the borrowers wanting to go with the fixed rate mortgages.

Earlier this year, the fixed rates started to swell before the variable rates which made people opt with the latter as that was the only way they could qualify for a mortgage. In fact, data released from the Canada Mortgage and Housing Corporation indicates that about 56.9% of the mortgages taken out earlier this year were variable rate mortgages. All thanks to the 5.25% rate of Stress Test for variable rate mortgages that was considerably lower than the rate at which people were Stress Tested if they opted for the fixed rate mortgages.

Even this scenario has drastically changed since the 100 basis points increase in Interest Rates introduced on 13th July this year. Even the variable rate mortgages have started to look out of reach for a lot of people, simply because of the steep asks of the Stress Test.


Private lenders are a very good alternative for such people in the current situation where they are not able to qualify the Mortgage Stress Test. Private lenders usually do not require such tests and are quite easy to work with, although their interest rates may be higher.

Till there is a substantial change brought about to the Mortgage Stress Test, one cannot simply wait for it to happen. You need a time-tested Mortgage Broker to guide you through this confusing situation. Their experience and industry connections make them the perfect professionals to take well calculated decisions despite the financial turmoil going on. You can count on Pankaj Aggarwal to safely assist you towards your goals with minimal effort from your side. His dedication for work and exceptional customer handling make him the perfect Mortgage Broker, what are you waiting for? Contact us now to discuss further details!

Bond Yields Take A Dive! What Does This Mean For Your Mortgage?

The Canadian mortgage market has been experiencing a very turbulent time since March of 2022. The interest rates have seen overnight increases from The Bank of Canada. Let us roll over back to 2020 in order to understand today’s situation better. The COVID 19 pandemic forced countries to enforce lockdowns and this resulted in massive economic crashes across the globe.

The Canadian government decided to tackle this situation by decreasing the interest rates to a record low. This initially paid dividends as people flocked to the real estate market and demand soared. This massive demand for real estate eventually caught up with the availability and started causing shortages. With interest rates this low, the demand never slowed down causing the property rates to rise steeply. This started the inflation wave in Canada and now to control this situation, the government started spiking the interest rates to slow down the market. The bond yields took a dive over 30 basis points on Friday and now the fixed mortgage rates fell to 2.84%, which were 3.15% a day earlier. Market analysts see this as the early signs of the inevitable recession.

Effects on Fixed Mortgage Rates

Well this is still early to make any predictions but still experts believe that the fixed mortgage rates might experience a further dip in near future. Still inflation can not be so simply dealt with a single financial instrument as it has more complexities to it.

Effects on Variable Mortgage Rates

Variable mortgage rates do not seem to be slowing down anytime soon with The Bank of Canada set to increase overnight rates again at its next meeting. Based on recent calculations the average monthly mortgage payment has increased by more than $1100 over the past 10 months.

What should you do?

We understand this is a very technical set of information’s to dump on anyone in a pinch. These are quite turbulent times and we would strongly suggest consulting an expert on the matter. A mortgage broker with good knowledge can successfully guide you through this. As they have the industry insider information, they are always in a much better position to make decisions for you.

Mr. Pankaj Aggarwal from Mortgage Alliance is an industry stalwart with years of experience and sound knowledge. He has guided his innumerable clients to financial safety and a beautiful home, which they can call theirs.

You can make your dream of buying a home come true with Mortgage Alliance , even in the current chaotic economic circumstances. We are here to help you, book a free consultation now!

Riding the inflation wave

Canada is currently facing problems with inflation as interest rates have peaked to a 30 year record. This has caused a lot of commotion in the market and now The Bank of Canada has come forward to outline a few of the vulnerabilities of Canada’s financial future.

In a big statement, The Bank of Canada made a prediction that some of the mortgage payments may see an increase of up to 45% by the year 2025. The Bank of Canada conducted a review of the financial system and released a report on 9th June 2022. The review report states that Canadians are likely to face a problem with housing affordability.

In a simulation run for the review, it stated that those who took out a mortgage in 2020-21 would face massive trouble in the form of monthly mortgage payments, seeing an increase of up to 44% with their 2025-26 renewal. If their mortgage to income ratio is high, this rate could climb to 45%.

Even those with fixed rate mortgages could see a jump of up to 24% with their mortgage renewals and that rate could reach 26% if their mortgage to income ratio is considered high.

This is some troubling news for everyone, as a lot of people had bought property with mortgages when the interest rates dipped to record low in 2020. The housing market was climbing slowly and regularly until pandemic took the world by storm and every economic system halted. This was the first time, for what we consider our modern world, stood completely still. To kick start the economy back into action, the Canadian government reduced interest rates, invoking everyone’s attention towards real estate market.

The housing market saw a frenzy that was never witnessed before. Everyone wanted a piece of the low interest pie. The overcrowding in the housing market meant that demand was always going to be higher than supply and this was always going to result in price hikes. Even people with properties started thinking about selling, to take advantage of the recent price hikes and started overpricing. Even then people kept buying because of the record low rates.

Now this news brought to light by The Bank of Canada will financially trouble all these buyers who were never prepared to see such steep interest rate increases. People are already worried as to how they are now going to survive this inflation wave. With limited incomes and ever increasing interest rates, more and more people will be financially suffocated to sell off their properties.

A good mortgage broker is crucial in such circumstances. As they have the skills and experience to tackle such intricate challenges and to survive financial turmoils. They can assist their clients to successfully navigate these troubling waters to keep afloat and have a comfortable future. They are the professionals that can help consumers ride this wave of inflation, by helping them make the right decisions. Decisions like choosing between fixed rate and variable rate mortgages, when to buy and so on.

My Mortgage Consultant is your best bet when it comes to taking financial advice and finding the best mortgage. Pankaj Aggarwal, our best broker, has in-depth understanding of market conditions and a natural talent of reading the industry trends. If you are looking to buy a home for yourself, he is the person you want to consult. He can safeguard you from future market inconsistencies while getting the best deals for you to make your dream a reality. Don’t hold your decision to buy a home. Just book a free consultation to get your doubts cleared.

Bank of Canada hikes rates for first the time since 2018

The Bank of Canada hiked its key overnight interest price for the first time in three years, kicking off a string of increases which might be geared at curtailing warm inflation at the same time as Russia’s invasion of Ukraine provides worldwide uncertainty.

The Bank of Canada introduced that it is elevating its key overnight rate by a quarter of a percentage point to 0.5 in line with cent, as it is attempting to fight inflation driven higher by energy prices to supply chain woes caused by the COVID-19 pandemic.

A few experts agree that this  would make it harder for Canadian households already struggling with heavy debt degrees. People who had been shopping for real property at report charges, and a number of that have been with variable costs. Which hints at higher monthly prices for anybody wearing debt.

In January, the financial institution surprised markets by holding rates even as it said the economy had broadly recovered, taking the more measured approach of formally casting off its commitment to keep rates low and clearly signaling that the increases were on its way.

The hikes have been anticipated for so long that they’re already blanketed in the fixed mortgage  rates. As far as the variable mortgage rate , there’s no question prices are actually going to move up.

A few modern economists wondered whether or not the rate hike will have plenty of effect on inflation in Canada.To slow inflation with fee hikes, they’d need to be so excessive that it may bring the economy to a screeching halt.

The remarkable hike might also have the biggest impact on how households manipulate their debt, but the Bank of Canada would need to increase rates by a full percentage point earlier than there may be an effect on the United States’ housing market. This increase is warmly welcomed by means of our United States’ monetary experts who look to the Bank of Canada  to pour some bloodless water on our ‘hot potato’ housing market. 

The BoC rate was at 1.75% before the pandemic hit in early 2020. Many experts are suggesting that the BoC will pursue a target ‘neutral rate’ of at least 1.75-2.0% within the next year or two.

With variable rates at all-time lows for months now, those with variable-price mortgages may also all of sudden experience a new situation about their monthly mortgage payments. The BoC rate was at 1.75% before the pandemic hit in early 2020. Many experts are suggesting that the BoC will pursue a target ‘neutral rate’ of at least 1.75-2.0% .Of course, no one has a crystal ball to know where rates will eventually end up, or how economic factors (like high inflation) may interfere. But there’s still room before reaching pre-pandemic rate levels.

We were all aware that this was coming.We are available to help, our broker can answer your questions about your future mortgage. Make sure your mortgage plan isn’t left in the wind.

Why rent and throw away your money, when you can be house rich!

Choosing to rent or buy a home is a major decision that affects lifestyle and financial health. Most of us can’t wait to get on the property ladder – right? But to buy(mortgage) or Rent, that is the question. Buying a home is indeed an enormous investment for most people. So, it is important not to rush into a hasty decision but make a well-thought-out and planned decision. However, it is believed that in the long run, buying your own space usually offers better value than renting as owning brings emotional connection and a sense of stability that renting won’t
bring.  Buying versus renting a home is a very individual decision but, If you are on the fence and can’t decide, read on to get an insight on how Mortgage or owning is anytime better than renting.
Mortgage vs Renting
et’s be honest, buying a home, or an office is no petty expense. Owning comes with a lot of responsibilities – large upfront costs, paying a deposit, legal and mortgage set up fees, recurring property taxes and insurance payments along with the cost of maintenance and upkeep.
Whereas Renting is known as Dead Money as despite paying the rent every month, it doesn’t give you anything back. However, it is flexible and requires fewer responsibilities. Keeping those costs aside, mortgage repayments are generally similar in rent but have humongous benefits beginning with gaining equity, thereby diminishing monthly outgoings each month. Let’s dive in for more benefits and comparison;
● As we know, a mortgage encompasses debt and interest, with each month’s repayment, there is a substantial decrease in the interest. So, monthly repayments get tiny as we head closer to finishing the mortgage repayments, thereby becoming the absolute owner in contrast to renting. You will only be a tenant despite paying the rent for months.
● So, the funds paid towards repaying the mortgage provider also go back into the home in the form of investment. This means one can potentially make a profit if the property prices rise or use the property as a guarantee to get a loan or use it for future passive income (renting extra space or home), which is not possible in the case of renting as all the rent payments go to the landlord without any long-run benefits.
● Mortgage payments can fluctuate, i.e., increase or decrease from year to year as the interest rate can change from year to year after an initial fixed-rate period. Still, with rent, payments can bounce considerably from one year to the next as the landlord increases the rent by a certain percentage every year.
● A mortgage has a multitude of tax benefits as it includes interest payments, i.e., the cost of financing. In the early years of a mortgage term, one pays towards reducing the interest due on loan, and then luckily can reduce/cut down the mortgage interest payments to reduce the taxable income. Still, this deduction isn’t an option with rent payments.
● Mortgages include homeowner’s insurance, whereas renters don’t have insurance, so are not shielded in the event of fire or theft as a landlord’s insurance policy doesn’t cover a tenant’s belongings.
Now, few more privileges and perks for the owners in contrast to the tenants.
● Owners will have more rights and can spend money altering fixtures, modifying and thereby improving the home and increasing its value without the landlord’s permission.
● Soon after paying off the mortgage, one can live in their home for free and set up for a comfortable retirement. That’s not something you’ll ever be able to do as long as you’re renting.
● Owning a home allows you to build wealth to purchase future homes as their homes gain value, and buying could also increase the net worth in ways renting can’t.

As we all know, due to the pandemic mortgage rates have fallen to an all-time low. So, it’s worth looking at the average costs and various options to help you own your home or office. Our Mortgage Broker at My Mortgage Consultant in association with Mortgage Alliance can help you decide which option is best for you and make the entire process hassle- free and seamless with our experienced and professional financial experts.