Buying adds up for renters

Monthly mortgage repayments on a $250,000 loan have fallen more than 20% from when interest rates peaked eight months ago. Many renters coping with high housing costs are finding that lower interest rates are making buying a very competitive option for them.

Last July, when rates were around 8.95 to 9.6 per cent, mortgage repayments on a $250,000 loan were about $2,090 to $2,202 a month. Major banks are expected to begin offering home loans at 5.74% to 6.91% with repayments of about $1,572 to $1,753 per month. That compares favourably with median rents of $1,317 to $1,646 per month in Melbourne in December 2008.