With mortgage rates reaching new heights, how can you build wealth with homeownership off the table – Edmonton Journal

While buying a home is seen as the greatest investment you can make, there are other ways to lock in long-term financial gains

Author of the article:

MoneyWise

James Battiston

Elena_Alex_Ferns/Shutterstock

Article content

A five-year conventional mortgage has risen from 4.79 per cent interest at the start of the year to 6.04 per cent. Thirty-year fixed rate mortgages rose above six per cent, a rate not seen since 2008, and 43 per cent of adults are putting their home buying plans on hold.

Advertisement 2

This advertisement has not loaded yet, but your article continues below.

Article content

Relying on homeownership as a way to build your wealth might seem like an impossibility.

While owning a home has traditionally been perceived as a core element for building wealth, there are still ways you can make this happen.

The power of renting

People often tout the benefits of owning a home, but they ignore the benefits of renting.

Article content

According to the Canada Mortgage and Housing Corporation, the average rent for a two-bedroom apartment in October of 2021 was $1,771, an increase of about 6.5 per cent from the previous year.

Don’t miss

Advertisement 3

This advertisement has not loaded yet, but your article continues below.

Article content

For the same period, nationally, the average scheduled monthly payments for new mortgage loans is $1563. For the first quarter of 2022, that amount was up to $1,635. While the average mortgage is cheaper than the average rent, it’s important to keep other costs of home ownership in mind.

To buy a home you need to make a down payment of at least three per cent. There are also costs such as insurance, property taxes and utilities that are added to monthly expenses.

If you calculate the difference between what you’re paying in rent and what you would be paying to own a home, you …….

Source: https://edmontonjournal.com/moneywise-pro/with-mortgage-rates-reaching-new-heights-how-can-you-build-wealth-with-homeownership-off-the-table