Few people can afford to finance the purchase, construction or complete renovation of a property solely from their own savings. Those who do not have enough money of their own can use a mortgage. A mortgage is a long-term loan that is secured by a lien on the property. Banks provide both special-purpose mortgages and so-called American mortgages (non-purpose mortgages), where the borrowed money can be used for anything.

Advantages of buying your own property with a mortgage

• You get the housing you want
  
• You are the owner of the property and have security of tenure
  
• Property market prices rise over time, increasing your wealth
  
• You can rent out the property and gain a passive source of income
  
• The monthly mortgage payment is usually comparable to market rents

Advantages of living in rented accommodation

• In the case of a rented apartment or house, you can move in and out very quickly
• You usually only need to pay a refundable deposit of 2 to 3 rents to move into your rental
• Major repairs and investments are paid for by the property owner
  You are not burdened with a mortgage loan
• You don't pay property tax and, if renting directly from the landlord, no estate agent commission

Property prices are rising over time

One of the big advantages of living in your own home is security. The property is your property and no one can raise your rent or give you notice to leave the apartment or house. You can also invest your savings in upgrading the property and increasing its value. Some people are worried about buying a property on a mortgage. For example, they are worried that the mortgage repayments will put too much strain on their household budget, they won't have enough money to cover the repayments if they become seriously ill or lose their job. But these fears are unnecessary. Along with a mortgage, you can take out life insurance to protect your family budget in the event of long-term illness, treatment for a serious injury or death. Anyone applying for a mortgage can also set up a monthly mortgage payment so that there is enough money left in the family budget for both routine and unexpected expenses. You can also choose a mortgage interest rate fixation period during which the monthly payment amount does not change.

A mortgage is not just a way to own a home. Given the long-term rise in property prices, buying a house or apartment can also serve as a quality investment.