Are You Throwing Away £100 A Month?

These days it is understandable that everyone is looking for ways to save money and get the best deals available. Most people have learnt the benefits of using comparison sites such as moneysupermarket.com to find information on financial products and services, such as loans, mortgage deals and credit-card offers. However, many people don't realise that choosing to buy a house instead of renting one could save them up to £100 a month.

The unstable financial situation of the past couple of years has made most people watch their monthly budgets carefully, making sure they know exactly what comes in and what goes out. Choosing the products and services they use wisely can help them make the most of their money. In today's circumstances, taking on a mortgage and owning your own property could probably help you to save money every month.

How Much Could You Save?

Recent research on the financial implications of buying a property shows that average first-time buyers would pay around £567 a month on mortgage payments on a two-bedroom flat, whereas those renting would be paying up to £677 – over £100 more. In a year this could be a saving of up to £1200 for those who are paying mortgages and at the end of the term of the mortgage they will own the property outright.

Of course, this hasn't always been the case. As recently as 2008 the situation was reversed and paying rent was actually easier on the pocket than meeting mortgage payments. Changes in interest rates now benefit property owners, although many people are still nervous of getting their feet on the property ladder.

What to Expect

If you are tempted by the thought of owning your own home instead of lining someone else's pockets by paying rent, it is important to take a good look at your current monthly incomings and outgoings. You should get some impartial advice about what mortgage deals are available and what would suit you and your lifestyle.

The mortgage market can be very confusing for first-time buyers, so knowing what deals are available before you start can give you an idea of what will be expected of you by lenders. From trackers and interest-only loans to standard repayment mortgages, there are so many products out that you are bound to find the right one for you.

It is no secret that lenders are being extremely picky these days, so be realistic about your finances and make sure you will be able to comfortably meet the repayments each month. You will also need to have a substantial deposit, as virtually all lenders will ask for one these days. There will be administration fees and other costs that you might not expect.

However, if you do make the decision to own your own property, you will not just save yourself some money each month. You will have made an investment that could prove to be an extremely good deal in the long run.

Sam is a financial expert based in the UK.