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Comment by taneq | Hacker News Reader

It's only a waste if you don't put the difference to work in some way.

Owning a house outright is great (I'm 1/3 of the way there) but for most, a 30-year mortgage is no more of a wise decision than a rental. You're just swapping landlord for bank.

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The mortgage interest is deductible, and for many people the one thing that makes it possible to itemize deductions rather than take the standard. That's an advantage that renting doesn't have, all else being equal.

> You're just swapping landlord for bank.

And even if you pay off your mortgage you still don't technically own it due to yearly property taxes.

One thing I really hated about living in an apartment was that the landlord would show up twice a year with very little warning to inspect the fire alarms etc. As a security person, having all the keys to my home and neighbors homes sitting in a nearby office wasn't very reassuring of my safety or privacy.

The bank on the other hand doesn't care what you do with your alarms or anything else as long as their payments keep showing up.

Not only do taxes pass through to renters, very often they are substantially higher. In New York, for instance, there is a substantial school tax credit for homeowners not available to rental properties. In addition, some cities have a homestead property tax rate that is substantially lower than the commercial tax rate applicable to rental properties.

Exactly. You are either renting the money or the house. You might as well put your equity into a diversified mutual fund. However, there are massive nonfinancial benefits of owning a home, don't forget

I can drill holes in the walls wherever I want!

Seriously though, renting sucks compared with owning, for all those nonfinancial reasons you mention.

Assuming you can rent or buy an equivalent property, in most markets, the monthly outlay is approximately the same. There's very few circumstances where a renter has such an excess of money that they could make any meaningful gains off of alternative investments.

Over time this changes, assuming the renter and the owner have incomes that increase, rent also increases on the same property over time (usually on about par with inflation, but sometimes faster), while the owner's mortgage stays fixed. As a percentage of income, it's the owner who's more likely to have excess income they can be investing elsewhere.

After 30 years (or repayment of their mortgage if sooner), the owner's property is as close to free as you can get and they can invest all of the money the renter is now spending.

You are forgetting that your down payment ( and equity )is tied up in the house, when it could be invested elsewhere.

If you run the numbers and assume a market rate of return on most investments, it's very hard to turn the relatively small amount of money a down payment is into a net gain after 30 years.

that statement is simply false

feel free to run the numbers and present here

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