Rent and Credit > Is Renting a Better Option Than a Mortgage in 2025?

Is Renting a Better Option Than a Mortgage in 2025?

Wollit Team2 minute read · Updated 28th August 2025

Choosing between renting and buying feels harder than ever right now. With house prices high and mortgage rates going up and down, many people wonder if renting might actually be the smarter choice.

We understand this decision can feel overwhelming. Let's break it down together.

The Real Cost of Renting

Renting looks cheaper at first. But here's what you're really paying for:

Monthly rent - This never stops. Most landlords put rent up by 3-5% every year.

No wealth building - Your monthly payments help your landlord build wealth, not you.

Less control - You can't paint the walls or get that kitchen you've always wanted.

Less security - Your landlord could decide to sell or end your tenancy.

The good news? When something breaks, it's not your problem to fix. No surprise repair bills or worrying about the boiler.

The Real Cost of Buying

Buying means much more than just monthly mortgage payments. Here's what you need upfront:

Deposit - Usually 10-20% of what the house costs

Stamp duty - Can cost thousands depending on the house priceLegal fees - Solicitor and survey costs, usually £2,000-£5,000

Moving costs - Often forgotten but can easily hit £1,000

Every month you'll pay your mortgage, council tax, insurance, and maintenance costs. But here's the key difference: each mortgage payment builds wealth in your home. And you can paint those walls any colour you want.

What This Means for Your Future

If You Keep Renting Let's say you pay £1,200 rent today. In 30 years, you could be paying over £2,500 because of regular increases. Over three decades, you might spend £600,000+ on rent with no house to show for it.

If You Buy Instead Despite higher costs at the start, buying often works out cheaper long-term. UK house prices usually go up over time. The long-term average is around 4-5% each year.

Here's what this means: your monthly mortgage payments help you own something valuable that typically grows in worth.

When Renting Makes Sense

We understand that renting might be right for you if:

You're building your credit for future home buying
Your income changes or you switch jobs often
You like being able to move easily
House prices feel impossible in your area
You're new to the UK and still getting settled

When Buying Makes Sense

Buying could be the better choice if:

You have steady income and good credit
You're planning to stay put for 5+ years
You can afford the deposit without using up all your savings
You want to build wealth for your future

Your Credit Score Changes Everything

Here's something important: your credit score massively impacts this decision.

Poor credit means higher mortgage rates or getting turned down for rentals. If your credit needs work, focus on building it up while you save for a deposit.

Better credit scores can save you tens of thousands on mortgage interest. Even if you're renting now, improving your credit opens doors to buying a home with better deals.

This is where Wollit can help. Building your credit while you're deciding gives you more options later.

Making Your Choice

Both renting and buying can be smart choices. It depends on your situation.

Ask yourself these questions:

How long do you want to stay in your current area?
Can you afford the upfront costs without emptying your savings?
Is your income steady enough for mortgage payments?
What matters more: flexibility or building wealth?

The Bottom Line

There's no right answer for everyone in 2025. Renting gives you flexibility and lower upfront costs. Buying builds wealth over time despite higher initial costs.

Your credit score, how stable your finances are, and what you want from life should guide your decision.

Whatever you choose, focus on strengthening your financial position. Good credit and healthy saving habits help both renters and buyers get better opportunities.