If you've ever noticed the joy on the faces of people discussing their home renovation plans and local neighbourhood characteristics, you'll know that home ownership creates a new sense of wellbeing in people's lives. This sense of 'financial wellbeing' affects many aspects of the homeowners' lives and is a huge advantage of home ownership.
A report conducted by CBA and the Melbourne Institute of Applied Economic & Social Research (MI) at the University of Melbourne has found that home owners have much higher “financial wellbeing” than renters, with those without mortgages reporting the highest levels of wellbeing.
So, what is it about owning your own home that instils financial wellbeing?
Staying in one place
One of the best advantages of home ownership compared to renting is that you can stay in your home until you are ready to move. Not only is this financially beneficial, because you don't need to accumulate the extra costs of moving, but it also creates a connection to your local neighbourhood. Homeowners are often more passionate about the long-term future of their neighbourhood including local facilities and development plans. This security is very reassuring for many people.
Personalising your home
While you are renting, you are, to some extent, at the mercy of the plans of your landlord. Renters need to ask the permission of their landlord to make small changes in their home and lifestyle such as hanging pictures on the walls or adopting new pets. Homeowners can make their own decisions on how to personalise their own homes which often leads to a great overall sense of stability and comfort in their home.
Building an asset
Another advantage of staying in one place is that your monthly mortgage payments end up contributing towards the purchase of your home, rather than going into your landlord's pocket. While in some cases the overall cost of renting may be close to the regular mortgage payment, once you have paid off the mortgage over your working life you can enjoy retirement in your home which you own in full. Equally, the asset can also be leveraged for loans which can help to build your overall wealth.
Achievement and pride
For many couples, home ownership is seen as one of the traditional steps in adulthood and is a vital stage in feeling secure enough to make other decisions such as having children. Many people feel a lot of pride when they look around their owned home and know that they are the ultimate owners of that space.
Creating financial stability
The current era is a great one in which to start buying a home as home interest rates are at their lowest rate in years. Many homeowners are taking the opportunity to get home loans that take advantage of the low interest rate by locking in low fixed rates or enjoying the low variable rates. It can be a great feeling to take control of your overall financial situation by committing to a long term investment like buying the home that you live in.
Buying a home is an important decision. It is not just a financial decision, but a decision that improves the social and emotional spheres of your life. If you want to explore the idea of buying a home and increasing your financial wellbeing, then you should contact Mint Equity, experienced mortgage broker and explore what kind of home loan you could achieve.