The offer of apartments for rent and purchase on the primary and secondary market is very large. The real estate market has been the most dynamically developing industry in recent years. Many people face the dilemma which option is the most profitable.
Apartments for rent
This offer is addressed primarily to young people who are studying or have started working. Their advantage is the ability to choose the most convenient location related to close access to the university or work. And basically the advantages of independent living in an independent premises end there. The rental price and payment for utilities are high.
An alternative to a rented flat is to buy a flat on a mortgage. The monthly rental costs and loan installments are usually comparable. The main difference is the end result. By renting an apartment we generate income for the owner, we always have to adapt to his requirements.
If we buy a flat on a mortgage, we will be its owners in the future, its value is our capital. We can sell or rent it at any time. Before you go to the bank to submit a loan application, check what you need to know about housing loans and what documents you need to be able to apply for a loan.
Fixed or decreasing installment?
In principle, most bank customers choose fixed installments. Their size can match the possibilities of the household budget, they seem safe, require less creditworthiness than with decreasing installments. Only a small percentage of customers are aware that equal installments are associated with higher costs.
In the case of large loans for a long period of time, the difference may even reach tens of thousands of zlotys. Why such a difference?
It mainly results from the structure of installments. In the case of decreasing installments, the principal part is the capital installment, which systematically reduces the debt and interest owed to it. Check also what the mortgage installment amount depends on.
In the case of equal installments, capital is divided into the number of installments corresponding to the amount of capital. However, interest constitutes a significant amount of an equal installment. Repayment of capital is much slower than in the case of decreasing installments and much more expensive.
Very often consumers are unaware of credit advisers who recommend, first of all, equal installments, bringing the bank greater profits.