Buying is no longer worthwhile – tenants have an advantage

From this point of view, the purchase is a good deal: Instead of renting EUR 714, interest on the loan is now only EUR 525, making savings of EUR 189 per month, or EUR 2268 per year. However, there are now 105,000 euros in savings in the apartment, which the household could have invested elsewhere without buying the property. If you apply the remaining rental savings (after deducting interest on the loan) to this capital investment, the return is 2.2 percent. (2268 euros divided by 105,000 euros.) Even that is not very much. After all, real estate entails risks, especially when it comes to credit financing. If a tenant household were to invest the 105,000 euros at a higher return, i.e. more than 2.2 percent, they would be in a better financial position than the buyer household.