Between renting a house and buying a house using a bank loan, which one is better?

This is a question that people, especially those who work in the office, usually ask themselves.

Honestly, who doesn’t want to own their own house? Everyone wants privacy. But is it wise to take out a loan from the bank to purchase a house?

Most people might think buying a house is better than renting if they save money and have a salary, because after many years, they still won't own the house. In contrast, if they take a loan to buy a house, their monthly payments may be similar, but eventually, the house will belong to them. 

It is not wrong to think that way, but you should consider it carefully because even with a salary and a stable living situation, a small change could significantly impact your entire life. 

Therefore, if you are considering taking out a bank loan to purchase a house, evaluate your finances and overall economic situation in the following ways:

How many sources of income do you have? 

If you have only one source of income, you might pose a financial risk. It is advisable to seek additional sources of income before deciding to take out a loan.

Are your earnings much? 

This is because paying off your loan at a rate that does not exceed ten percent of your monthly earnings reduces the risk. Therefore, please ensure you calculate it carefully first.

You have savings? 

It is important to have backup savings, which can be stored in a bank or kept in a home piggy bank. If you haven't yet developed a habit of saving, it is advisable to start before applying for a loan.

Are you a kindhearted person who enjoys helping others?

If you are, there is a significant risk that you will lose money by helping others. Therefore, you should avoid taking risks, as it could lead to drowning in debt.

Are you currently healthy or experiencing illness?

If you are healthy, you are fortunate. If you have a health problem or your health is poor, it’s not advisable to get a loan to buy a house, even if you feel you need one. This will cause you to experience double stress, negatively impacting both your finances and your quality of life. 

Therefore, check up first. If you have any of the previously mentioned issues, it is advisable to rent a house.