Methinks you should be glad you're renting rather than owning. As investors,we need to set emotions of owning a house aside and look at the raw data. So lets do the numbers.
To start with,you pay ridiculous interest on the mortgage,and you pay it upfront. You do not pay interest on rent. So lets say you buy a house for Ksh.6M and had no interest and lets say your monthly payment is 50K per month. It would take you 120 months or 10 years to pay it off. Now lets see what happens when you sign that mortgage for the same amount for 20 yrs at an interest rate of 15%. Now suddenly,your monthly payment has jumped from 50K to 79K and it would take you twice the amount of time to pay it off and also have to pay an extra 13M in interest on top of your 6M principal just to fully own your house after 20 years. At that rate,your house has to more than treble in value just to break even.
Then on top of that you have to pay homeowners insurance each year. Halafu there is the government and city tax. Maintenance expenses. I'm not sure how much these figures would be for a 6M house in Nai but you can imagine you will be paying much more than the 79K per month on your mortgage. So lets just say the expenses are another 3K per month.So over 20 years period with inflation this figure is another 1M.
Now lets compare to the renter,he does not pay any homeowners insurance,tax or maintenance fees. If anything breaks he just calls the landlord to fix it ASAP. So he still pays the 50K per month for the same place.
So lets compare:
20 years of home ownership: 20M
20 years of rental: 12M
The renter saves 8M over 20 years.
Now can you imagine what you could do with 8M savings over 20 years if you were investing this money in stocks? Lets just assume a modest return of 10% per year. Now calculate the compounded ROI of 33K per month(83K mortgage minus 50K rent). Your investment return could be worth 20M after 20 years. Now we know that the true cost is the opportunity cost.
Mortgage proponents argue that,but houses appreciate at a high rate so you get to build equity at the end of the 20 years which you can get by selling your house. To that I say good luck,houses have appreciated so ridiculously that if you bought a house now,forget getting the same appreciation in 20 years similar to what people who bough 20 years ago got in the last few years. Remember for you to break even,your house has to more than treble. And the renter still gets ahead of you by getting 20M after 20 years in form of ROI.
Not those are just the raw figures,how about other issues related to home ownership. What if you want to move because you have been IDPed,or your are moving on up,or you hate Nai,or for whatever reason. The renter can just up and leave,the only cost is the deposit. The homeowner has to list the property,pay commision to listing agents,incur closing costs. And then if you want to buy,you go through the same hastle with closing costs again.
Bottom line,paying rent is not throwing money away. The money the renster saves is enough for him to buy a house cash,or rent an extra 10 years for less money without extra costs. The renter can move at will without incuring closing costs etc. The homeowner and the renters are both renters,the former rents from the bank at a higher cost,the later rents from the landlord at a cheaper cost. And at the end of the 20 years,the renter has more money saved than the homeonewer.
Sorry for the long post,but I feel that mortgage is the biggest investment one can ever make so sober minds need to prevail. I invite homeonership proponents to shoot holes through my arguments using facts,not emotions.
When in doubt,follow the money.