Top 5 Financial Benefits of Owning a Home

Learn the major financial benefits of homeownership. Plus—4 tax saving tips for savvy buyers.

Laura Adams, MBA
5-minute read
Episode #252

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Since the mortgage crisis, whether it’s better to own or rent your home has been a controversial topic. Some people have sworn off homeownership forever and others have decided that there’s never been a better time to buy multiple properties. No matter your opinion, you should understand the 5 major financial benefits that homeowners receive so you can evaluate if becoming one is right for you.

Benefit #1: Paying a Low Mortgage Rate

Undoubtedly, one of the best reasons to make the leap into homeownership right now is that borrowing money is cheap. Interest rates are at historic lows, below 4% for a 30-year, fixed-rate mortgage and below 3.25% for a 15-year term.

Here’s an example using the current interest rates: The principal and interest you’d pay for a fixed-rate mortgage of $150,000 costs about $700 a month over 30 years, or $1,000 a month for 15 years. Ten years ago these same mortgages would have cost $1,000 for the 30-year option and close to $1,300 for a 15-year loan because the interest rates were higher.

Over the long run, low interest rates can make owning a home much cheaper than renting, in many parts of the country. Of course you have to factor in additional expenses—such as property tax, insurance, maintenance, a down payment, and closing costs—when considering whether you can truly afford to own a home. 

Benefit #2: Paying Low Home Prices

The second financial benefit to buying a home in our current economy is that real estate prices are depressed. In other words, real estate is still a bargain in most areas of the country.

If you have a home to sell, that’s not particularly comforting. But if you’re a first-time home buyer, you have a great opportunity to get into the real estate game at prices you might never see again. As home prices eventually trend back up, the appreciation allows homeowners to build wealth.


About the Author

Laura Adams, MBA

Laura Adams received an MBA from the University of Florida. She's an award-winning personal finance author, speaker, and consumer advocate who is a frequent, trusted source for the national media. Money-Smart Solopreneur: A Personal Finance System for Freelancers, Entrepreneurs, and Side-Hustlers is her newest title. Laura's previous book, Debt-Free Blueprint: How to Get Out of Debt and Build a Financial Life You Love, was an Amazon #1 New Release. Do you have a money question? Call the Money Girl listener line at 302-364-0308. Your question could be featured on the show.