Bank or rent installments? What do you choose?

Bank or rent installments? What do you choose?

Bank or rent installments? What do you choose? What are the main advantages for each element.

We know all too well that this subject is quite controversial in Romania. Foreigners, or Romanians with a “western mentality” are PRO rates at the bank and against RENT, while, of course, there are also people AGAINST bank rates and PRO rent.

Who wins this unprecedented "war"? Who is right? What's better? Why installments and not rent? Why rent and not installments?

We hear many discussions on Facebook groups, in forums, in everyday online conversations, and even in discussions with family / relatives or friends.

"The bank's slave for 30 years"

"You pay the installments to the bank with the money obtained from the rent and after 20-30 years it remains yours"

"In Romania, it is worth having bank installments and tenants to pay them"

"I buy in installments and I know it's mine and when I feel like it I can sell it"

"Why pay the landlord's fee when you can pay yours?"

"If you rent you throw money out the window"

And many such phrases.

Rent

Renting brings the following benefits:

flexibility: you are not "confined" to a safe place; you can always move to another area, another city, another country; you don't depend on the monthly rate

It is ideal for students, entrepreneurs or people who travel a lot for business purposes

you have time to get on your feet: when you are at the beginning of the road, it takes time for you to choose a career and you end up with a steady income that will satisfy you

you can share the house with other people and pay less on rent

you can choose the conditions in which you want to live (there are homes for rent for all budgets)

if you live long-term abroad, paying rent is much cheaper than buying a property abroad

you are not constrained to pay the installment at the bank (if you can no longer pay the rent you end it somehow, but if you no longer pay the rent at home you risk losing the house and the initial investment)

Bank installments

According to a recent study, in Bucharest, the monthly rate for an apartment of 45 square meters has an average of 420 euros, while the rent reaches 470 euros.

The rate for a loan is 12% lower than the rent. In other countries (eg Prague), the rate for the apartment is 40% higher than the rent. This explains the higher number of tenants in Western Europe.

Buying a home in installments has the following advantages:

the value of real estate increases over time

taxes are relatively low, as is insurance (depending on various factors)

you pay less in installments than in rent

you have control over the property: if you want to redecorate, you do it, if you want to replace the furniture, you can do it

you can rent the house at any time if, say, you can no longer afford to pay the monthly installment and move to parents / friends / on a cheaper rent (as well as tenants)

Why do most Romanians choose to pay bank installments to the detriment of the rented state?

According to official sources, currently 96% of Romanians are the owners of the homes in which they live.

There are many factors behind these decisions. Indeed, after high school, the best option in the short term is to rent. However, most people over the age of 25 are seriously considering buying a home.

Some would say that these factors derive from communism, because at that time our home was provided by the Romanian state.

People have become accustomed to owning a car, land, house, no matter what sacrifices this situation requires.

What should be the ideal bank rate for a decent living?

Although the bank accepts a degree of indebtedness of up to 45%, it would be ideal for the rate not to swallow more than 1/5 of the income.