Posted in To buy a house or to rent a PMQ. Always a difficult decision if you are posted to a new city/base with the Canadian Military.
Here are a few things to consider:
Payments: With interest rates near all-time lows, mortgage payments are cheaper than ever. For example, the payments on a $160K mortgage with a 5 year fixed rate of 2.79% would only be $738/month. Even after including property taxes, chances are this payment would be lower than what you would be paying out for a PMQ.
Increasing your net worth: With interest rates this low, over half of your first payment would go directly off the principal. Using the same example of a $160K mortgage at 2.79%, after 5 years your balance would be down to $136,023. Even if the value of whatever home you purchased hadn't increased whatsoever, your net worth would have increased by $24K.
Funding envelopes: Outside of the pension plan, the costs the military pay for with relation to housing are the most valuable benefit members of the forces receive. With 2 years of your COS date, Brookfield will cover expenses for legal fees, appraisals, land transfer tax and will give you money to potentially buy down the interest rate with (your posting allowance and your movement grant).
So prior to committing to rent a PMQ, it is well worth taking a few minutes to examine your options. Even if you might be a little short of the funds required for a 5% down payment, there may be a few options available to you that you haven't previously considered.
#trentonmortgages #rentingvsbuyingahouse #dndirp
