[WildGreenLeave]

I do get the feeling that NL/Amsterdam is one of the few exceptions to everything you are saying. I am aware of all the costs but 3 key things to note here: 1) I am not paying the real estate tax for this apartment. (This is a coulance thing from the Dutch government and is only available till the first of april for houses above 400k EU.) 2) The rents in Amsterdam are roughly the same as my mortgage. The interest rates are at an all time low at 1.4% for 20 years. 3) Interest rates can be deducted from my income so I don't have to pay tax over it (either 36% or 49%). While rent cannot be deducted.

To give you an idea about numbers. My mortgage is around 440k with a monthly payment of +/- 1500eu (includes interest). For the same apartment a 1500eu rent a month isn't unheard of. On top of this you have to pay for electricity and heating yourself and the insurance. When renting the additional tax (e.g. waste or sewer) is also added on top of the monthly payment regardless of buying or renting. The only thing that you have to pay when buying is when things break down, or the so called 'VvE' which is an organisation maintaining the building itself.

So yes I do agree with the statement that it cannot easily be compared, but in the situation of The Netherlands I feel like this is the right choice to make.

Edit: Although, if you (or anyone) disagrees with it I am curious to know why.

[bearbawl]

I am not disagreeing with you. I don’t know all the numbers for your case and I don’t want to compute everything for your specific scenario.

But I’m just saying that there is a general assumption in most discussions around buying versus renting that buying is always better. It’s not.

It’s the general argument « when you buy you don’t throw your money out the window ».

In reality you do throw money out the window when you buy, only differently, and I’m highlighting the numbers people usually do not take into account when they make their comparison.

Comparing mortgage payments and rents is usually not the good way to do that, because the costs when you buy are only partially monthly based.

One other number I didn’t mention above: real estate agency fees.

[ryandrake]

Another thing to consider: You should not compare to your entire mortgage payment--only to the interest portion of the payment. The principal portion of the payment is not an expense: It goes from one of your pockets to the other because it is your own home equity. Also you need to apply any tax advantage you get from mortgage interest(in the USA it's deductible), so subtract your effective tax rate. You also need to add to that your estimated property taxes / 12 (and that's often tax deductible), and add any expected yearly expenses / 12.

So mortgage_interest * (1-T) + property_taxes/12 * (1-T) + home_expenses/12. Compare that to rent payment.