This time last year, interest rates were high and there was a strong case for renting and investing instead of buying a home. Boy, how things have changed!

Today, monthly mortgage and rent payments are similar in many areas. Property prices are dropping and interest rates have been cut to record lows. At the same time, rents have increased.

Pros of buying

Have you ever heard people say that rent money is ‘dead' money? The major advantage of buying a home is that your monthly repayments are paying off your own asset, not your landlord's.

For most of us, our home will be our biggest financial asset. After a couple of decades of repayments you should own it outright and live mortgage and rent-free. Wouldn't that be nice?

Buying a home makes you feel secure. There's no landlord, nobody to kick you out at the end of your lease and you can renovate as you please.

Cons of buying

Before you rush into buying, there are some disadvantages you should consider.

A mortgage is a big financial responsibility. Interest rates will eventually rise and you'll have to be able to cover higher repayments. Don't stretch yourself too far - what happens if you have to take a pay cut or lose your job?

You also have the added cost of maintaining your home, which you don't have if you're renting. If the toilet's blocked, you have to fork out for repairs. There are also extra transaction costs involved in buying, such as legal fees, so you don't want to buy and sell too often.

Ultimately, whether you choose to buy or rent, it's vital that you do your homework.

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