MEPX
Chapter 5 of 10All chapters
  1. 1Knowing your cashflow
  2. 2The emergency fund
  3. 3Debt
  4. 4Saving and compounding
  5. 5Housing and large costs
  6. 6Insurance
  7. 7Tax and payslips
  8. 8Long-term saving
  9. 9Fraud and pressure
  10. 10Making it stick

Chapter 5 of 10

Housing and large costs

The biggest line in most budgets.

Rent against buy

Buying adds maintenance, insurance, taxes and transaction costs, and ties you to a location. Renting is not throwing money away; it buys flexibility and avoids those costs.

  • Compare total cost of ownership, not mortgage payment against rent.
  • Transaction costs mean short ownership periods are usually poor value.

Mortgages

A small change in rate or term changes the total repaid enormously. Overpaying early saves the most, because early payments are almost entirely interest.