Which is growing more in Spain: rent or housing costs?

With rent prices rising, finding a place to live that doesn't take up more than half your salary is becoming a real challenge. In some big cities, such as Madrid or Barcelona, it is becoming increasingly difficult to rent a place without spending a lot of money. And in this situation, the idea of investing in real estate instead of renting is becoming more and more common, since despite having to take out a mortgage loan, the payment can be smaller every month. But what will be the most profitable for you at this point - renting or buying? The answer to this question depends on several different factors that you must consider.

According to calculations by mortgage adviser iAhorro

The average rental price is much higher than the mortgage payment. The data shows that renting in''You often have to move for work reasons or just don't know what to do in the future, renting may be the best option for you.

This is the easiest option to become independent for the first time or if you don't have the amount saved up to cover the down payment on a mortgage. All you need to do is pay the appropriate monthly payments. This also saves you on expenses such as taxes and other housing-related costs such as property taxes, which are usually paid by the owner.

On the other hand, one of the big disadvantages of renting nowadays is the extremely high rents, especially in big cities.

In the long term, you should also consider that this will be a payment that you will be paying forever and you will not be a homeowner. Unlike a mortgage, once the loan is paid off, the property will be all yours and you will no longer have that house payment (although there will be other associated costs such as taxes). In the case of renting, you will only be able to live in the property if you pay on time, so it will be an ongoing cost that you can't get rid of.

In the case of selling

the cost of apartments in Spain has risen by 7.1% in the last year, reaching 2016 euros/m². However, if you have a steady job and don't plan to move, buying a property can give you''stability. If you choose a mortgage, when the term expires and you've paid all your payments, the home will be all yours and you won't have that monthly payment anymore. Plus, you can always rent it out or sell it.

Of course, however, if you decide to apply for a mortgage, be aware that you will first need to have some initial savings to cover the down payment, as banks usually give mortgages for 80% of the value of the property. This means that you will need to have around 20% of the value at the start of the buying process.