In addition, Diapositivo's calculations assume that the market includes a good supply of rental stock.
In our corner of the world, it is cheaper for many people to buy then rent, if they have the requisite down payment (minimum 5%). That is due to the fact that rental properties are in short supply.
We don't have access to mortgages with terms of 25 or 30 years here - 5 years is as long as the government mortgage insurance programs will cover. We use approximately the same 25 - 30 year amortization periods (the interest compounding is calculated slightly differently).
The current competitive mortgage market makes it relatively easy to get a 3% rate on your 5 year term, 25 year amortization fixed mortgages.
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~Stone | "...of course, that's just my opinion. I could be wrong."~Dennis Miller