I’m renting in the city and want to a buy a place before it’s out of reach. Is now a good time to buy?

Yes and no. Helpful right?

Should I or shouldn’t I buy are questions that continue to plague the masses. We’re constantly told that renting means we’re throwing away money, but also renting affords us more discretionary income. On the flip side, the news tells us that if we don’t buy a home now, mortgage rates will go up. But if we buy now, we might miss a deal because the market might go down again. Unfortunately, it’s all kind of true, and the decision to buy is really your personal preference.

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Currently, you only need 5% in order to buy a home. This means if you bought a starter house at $500,000, 5% down is $25,000. Your monthly payments would be about $2,682 including approximately $375/month for taxes. This also includes the rolled up amount of $13,062 you need to pay to the CMCH for only putting down 5%.

Add in your utility bills – which could be $400 – and you have an approximation of $3,000 to carry your home. Alternatively, you could buy a condo for a lower price of $375,000. Put 5% down at $18,750 and your monthly fee would be about $2,100 including taxes and the CMCH insurance. However, you would need to factor in maintenance fees at $400/month plus your utilities. This could put you back up at $3,000 monthly.

Renting, on the other hand, will get you a 2-bedroom condo for about $2,200 to $2,600. That $400 you’re saving could be put into a high interest savings account to build your down payment. Over two years, you could have $9,600 or $9,800 with the accrued interest. Of course, the cost of homes is supposed to rise 3% every year, meaning your $500,000 home this year will be $530,000 in two years.

So, is it a good time to buy? You do the math, and let me know.