Mortgage vs Renting - The Million Euro Question

We recently chatted to Daft.ie at the AIB Mortgage Information Evening about the hot topics surrounding the Irish Property Market at the moment. A topical and prudent issue on the minds of property buyers at present is the age old question of whether one should continue to renting or take the plunge and buy a house.

Daft.ie produces and publishes their Sales and Rental Reports every quarter. These Daft.ie House Price reports are Ireland’s longest-running reports on property prices. 2015 sees their 71^st publication of these quarterly reports created by Ronan Lyons, Assistant Professor of Economics, Trinity College Dublin and Economist at Daft.ie. The data is sourced from Daft.ie and more recently the property price register for enhanced accuracy. Rather than predict property trends, it takes a more a retrospective look.

Objective of the reports

The report aims to help potential investors and home owners make better informed purchasing decisions before buying or renting a property.

Renting in Ireland in 2015

The bottom line? Rent has risen greatly in Dublin and we are in fact only 6% off the peak levels on record in 2007. However, Ronan Lyons, Economist at Daft.ie has noted these levels are expected to cool off in 2015.

Rental report insights

A major insight from the Daft.ie rental report came from the million euro question; should you buy now or continue to rent? Without providing an official stance on the issue, the company undertook an analysis exercise taking two bed, three bed and four bed homes in the Dublin area into account. They compared the cost of a mortgage versus the cost of renting within these separate property segments.

Renting vs buying a house: the verdict

In 13 of the 18 examples, it was cheaper to have a mortgage. Take the example of a three bed house in Dublin City Centre. The rental price per month was €1,690 per month versus a mortgage per month of €1,167.

By leaving these figures speak for themselves, it is clear that as things stand right now, getting a mortgage is better value.

If you’re considering moving from a rental situation and taking out a Mortgage with AIB, look at our AIB First Time Buyers Guide. Use our AIB Mortgage Calculator to discover your borrowing potential.

Allied Irish Banks, p.l.c. is an authorised agent and servicer of AIB Mortgage Bank in relation to origination and servicing of mortgage loans and mortgages. AIB Mortgage Bank is regulated by the Central Bank of Ireland. For regulatory information, please see here.