Rent VS mortgage: What is easier?(Mortgage is financial suicide!)

Let’s be honest – if one bought a house at about Rwf 40 million and the national growth rate for Rwanda is 11%, 10 years from it will be worth Rwf 84 million. And here we haven’t even calculated inflation because it will entirely depend on it as well. If you invested Rwf 40 million in a business, its growth can be about 20 times more than a house which the user always spends on and sometimes never sells.
Patrick Buchana
Patrick Buchana

Let’s be honest – if one bought a house at about Rwf 40 million and the national growth rate for Rwanda is 11%, 10 years from it will be worth Rwf 84 million. And here we haven’t even calculated inflation because it will entirely depend on it as well. If you invested Rwf 40 million in a business, its growth can be about 20 times more than a house which the user always spends on and sometimes never sells.

The mortgage that is paid over a long period of time doesn’t rule out the fact that one still pays a lot of money. A house that would have gone at about 70 million will cost about 100 million. And you find that it has tempted someone to borrow more than he can afford to pay back.

Borrowing money to own a house can drive up debt to income ratio and tires ones hands to get any other loan.

What if your business went bankrupt and a personal loan is the only way out? With a house loan, all you can do is watch it crumble. Not even a tuition loan can be given.

If things go south with your boss and you are on the line of those employees that may not be with the company the following month, the bank didn’t know that when they were giving you the loan and now it’s time to sweat the money out of any other source of income you have.

Guess what you will think of first - reselling the house and rent again.

A friend of mine once bought a house on loan in Kigali and two months later, she was transferred to work in Musanze for two years. If you ask me where she stays now,

I could say she is renting. And what happens after buying a house with a very huge loan, you realise that the neighborhood isn’t secure and you want to move out? What next? Do you get another loan to buy another house elsewhere or sell this one? It’s all tiring!

I am not saying that owning a house is bad. To be honest I would love to have my own home but a house mortgage loan isn’t the best idea.

I still don’t mind being in an apartment, using my loan for something with quick returns and not having to worry about the bank deducting heavy amounts from me every month.

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