Rent is 100% interest only payment!

We meet people who would like to pay cash for their homes. There are a lot of “gurus” out there who talk about saving for seven or eight years and paying cash for your home. BUT if you look closely at their numbers they often live in Texas or somewhere that a really nice house only cost $50,000. I could imagine saving $50,000 but here in Alberta an average house is $250-$300,000 so I think that might be difficult to save. Also, statistically on average house prices go up 7% a year. That means a $300,000 house is moving out of reach at the pace of $21,000 a year. That alone makes it difficult to keep up with your savings program.
Plus we were thinking... people often express concern over how much interest they pay on their house so that’s why they try and save BUT if you’re paying rent right now you are paying in essence 100% interest because 100% of the rent goes to your landlord and 0% goes to you.
From that perspective saving up a decent down payment and purchasing a modest home now and having equity go back in your pocket of $600-$800 a month is wiser than trying to wait until you can pay cash for a home.
PS. Buy a suited property and end up paying less than rent and you will own the home.
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