Scroll Plus topic · 104 lessons

Buying a home: deposits, mortgages and renting vs buying

Property is a Scroll Plus topic covering what moves the monthly cost of a home: the deposit, the rate, how long you'll stay, and the costs of buying and selling that most first budgets leave out.

Three lessons from the topic are below with their quizzes.

Lesson 11m 35s read · level 4

Fixed vs variable: your most expensive coin flip

Fixed = certainty for X years. Variable = follows the central bank rate, up and down.

FixedCertainty

VariableFollows base rate

A fixed-rate mortgage locks your interest rate for 2, 5, or 10 years; you pay a small premium for certainty. A variable rate follows the central bank's base rate plus a margin: typically cheaper today but moves every time the central bank moves.

Try this When you refinance: ask your broker to run both 2yr and 5yr options. Compare total cost over 5 years.

Quick check

Why might a 5-year fix not be 'cheaper' than expected even when rates feel high?

Lesson 21m 25s read · level 3

The 25% deposit myth

You don't need 25% to buy. You need 5%. But 25% gets you a much better rate.

Min deposit5%

Sweet spot25%

Mortgage rates step down at LTV (loan-to-value) bands: 95%, 90%, 85%, 80%, 75%, 60%. The biggest rate drops happen at 90% and 75%. A 10% deposit is the practical sweet spot for most first-time buyers; 25% (75% LTV) is the rate optimum.

Try this Decide your LTV target before you scope properties. It determines your monthly cost more than the listing price.

Quick check

At which LTV does the rate stop improving meaningfully?

Lesson 31m 40s read · level 3

Rent vs buy: maths matters less than time horizon

Renting forever isn't 'throwing money away.' Buying isn't always wealth-building. The honest answer depends on how long you'll stay.

Under 5 yrUsually rent

7+ yrBuying favourable

Rent vs buy decision: depends on staying duration, local price-to-rent ratios, opportunity cost, lifestyle. Under 3-5 years: usually rent (transaction costs dominate). 7+ years: buying often better. Calculate true cost: mortgage + maintenance + tax + opportunity cost. Geography matters. Both can build wealth differently.

Try this Rent vs buy: time horizon dominates. Under 5 yr usually rent. 7+ yr often buy. Calculate true cost including opportunity cost. Disciplined renter can match owner.

Quick check

Why is renting typically the right financial choice for a 2-3 year stay regardless of local market conditions?