With todays interest rates buying a home is more affordable than anytime in recent memory. Consider this scenario:

• Currently in Kelowna you can rent a 3 bedroom, 2 bathroom house with a detached garage for approximately \$1200. Assume that rent will increase by 3% per annum after 10 years this home will rent for \$1565/month. After 25 years, over \$2440/month!
• Now even if rent did not increase for the first 5 years the rent for the first year would be \$14,400. Over 5 years rent paid would be \$72,000. The total equity the renter would earn would be \$0.00
• The same home can be purchased in Kelowna today for approximately \$340,000. Assuming a down payment of \$40,000 and interest rates as low as 2.89% the monthly payment would be \$1405 with an annual payment of \$16,680. Over 5 years the total payments would be \$84,300.
• The difference adds up to be \$12,300 cheaper in favour of the renter over the 5 year term. However! The mortgage would have some principal repayment over those 5 years, \$44,040 to be exact. So in fact the homeowner is \$31,740 better off than the renter
• Now assume a 3% increase in property value, the home worth \$340,000 today would be worth \$357,000 in 5 years time giving the homeowner an additional \$17,000 in equity making them \$48,740 better off than the renter
• If you were to run the numbers out for the full 25 years the difference is over half a million dollars!

Play with the numbers yourself and notice how you're paying off more principal than interest after only one year of paying your mortgage! Amortization Calculator