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We often get to hear the adage "Rent Money Is Dead Money". For years this has been believed to be true.

Renting could be a better investment when the rent is less than the total of the interest paid on mortgage plus the maintenance cost of the property. So rent money is not "dead money". It is the price you pay for something of value and in this case it is your housing accommodation. And home purchase may not be the best use of a young person’s scarce financial resources. For a young person who does not have great financial discipline or cannot identify better alternative uses for their funds, then borrowing to buy a home, with its inherent forced saving, may be a good choice. But remember the there is an interest to pay.

The phrase "Rent Money Is Dead Money" and its implication that renting does not makes economic sense are dangerously misleading.

Footnote: This Online Calculator is provided to you free of charge, and on an "AS IS" basis, without any technical support or warranty of any kind from Eldus including, without limitation, a warranty of merchantability, fitness for a particular purpose and non-infringement.

Updated On: 12.12.29