Deciding if a Home Loan is Right for You

Mat for house bought with low home loan rates

If you’re a first time home buyer, deciding between renting and buying a home can be a daunting task. Especially when you’re trying to balance the benefits of saving up for a down payment versus being burdened by the debt of a mortgage. In this article, we’ll explore the long-term financial implications of both options and offer some insights to help you make the right decision.

Assuming a monthly rent cost of $2650 versus a monthly mortgage payment of $2673.53, both options seem comparable. However, it’s important to consider the long-term costs versus benefits. Don’t forget to factor in expenses when comparing these two options. For a more in-depth look at the pros and cons of each choice, examine the chart below.


Home Loan Costs vs Rent Costs

  Monthly Payment Number of Years Total Amount Paid Landlord/Bank Profits Equity in Home
Rent $2,675.00 30 $963,000.00 $963,000.00 $0.00
Buy $2,673.53 30 $962,470.80 $402,470.80 $560,000.00



Original Cost Annual Rate of Appreciation Value in 30 Years Equity from Appreciation
$700,000.00 5% $3,025,359.66 $2,325,359.66


Purchasing a home can be a great financial investment due to the home loan advantages of building equity and enjoying property appreciation. In contrast, a renter who pays $2650 monthly for 30 years ends up paying $963,000 without any asset to show for it. However, the thought of coming up with a down payment of $140,000 could deter a first-time homebuyer. The good news is that there are programs that offer benefits, such as first time home buyer credit and lower down payments, to help reduce the barrier to entry into the housing market.

Each monthly mortgage payment made by a buyer reduces the amount owed to the bank and increases the buyer’s net worth. Additionally, the value of the property appreciates over time, with a modest appreciation rate of 5% leading to substantial financial benefits. It’s important to note that expenses such as current rates and home closing costs need to be factored in when considering the true cost of purchasing a home.

In the end, the potential for building net worth over time through equity and appreciation makes home ownership a financially sound decision. In addition, lulls in housing market prices can give you a competitive advantage if you start looking at the right time.

And here at Alpine Bank, any of our friendly and knowledgeable mortgage lenders are happy to schedule a time to discuss options for purchasing your first home. Please reach out to your local lender. You can meet our team and make contact here.

About This Author


Alpine Bank Staff

Alpine Bank is an independent, employee-owned organization with headquarters in Glenwood Springs and banking offices across Colorado’s Western Slope, mountains and Front Range.

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