Home Ownership

Advantages of Homeownership

Family cooking in their kitchen and appreciating the benefits of owning a home

Becoming a homeowner comes with a lot of responsibility, but also a lot of rewards. To help you decide if owning a home makes the most sense for you, here are some of the main reasons people choose homeownership over renting.

Homeownership Can Be A Good Investment

While home prices move in cycles over the short-term, if you stay in your home for a long time, it could increase in value and give you a substantial return on your investment.

If you are currently renting a home or apartment, use the Rent vs Buy Calculator from Discover® Home Loans to help determine which option provides the most economic benefits for you over the time you plan to be in your residence. When using the calculator, be sure to consider potential future increases in your rent, as most landlords periodically raise rents.

You Build Equity

When you subtract the amount you owe on your home loan from the total value of your house, the amount left over is your home equity—the “dollar” value of your home that belongs to you. There are two ways to build equity:

  1. With each monthly payment you make, a portion goes toward reducing the amount you owe on your mortgage, which increases your equity.
  2. As your home's value increases, it creates more equity for you.

In a sense, paying your mortgage is a form of savings, since it increases your home equity. And you may be able to tap into that home equity if you need money in the future.

When necessary, you can borrow against your home equity to meet a variety of financial needs, including home improvements, education or medical expenses. A home equity loan or line of credit can also be used to pay off high interest credit card debt, since the interest rate is generally lower and the interest payments may be tax deductible (see your tax advisor for a determination). Read our Cash Out Refinance article for more information on how you might one day be able access the equity that you build in your home.

You Enjoy Significant Tax Deductions

Owning a home can reduce the amount you pay in income taxes each year. Your mortgage interest and property tax payments under certain circumstances may be deductible from your federal taxes. Many states consider these tax deductible as well. Even certain closing costs and loan discount points may also be tax deductible. In the early years of your mortgage, when interest represents the bulk of your monthly mortgage payment, these potential tax deductions can put a significant amount of money back in your pocket. Consult with your tax advisor to determine if your particular mortgage situation permits tax deductibility.

Build a Strong Credit History

When you buy a home and consistently make your monthly loan payments on time, it demonstrates to other lenders that you are a good borrower and your risk of defaulting on a loan is low. This strong credit history will be helpful in the future when you need other loans for buying a car, making improvements to your home, or paying other major expenses.

You’re Free to Create the Home You Want

Homeownership offers tremendous freedom to create the living environment that you have always wanted. You can own pets, paint rooms whatever color you like, make changes to the floors and carpeting and do all the things that make a house feel like your home – all without having to get approval from a landlord.

Consult your tax advisor about the tax deductibility of mortgage interest.

Did you know?

The home equity you’ve earned
can be used in a multitude of


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  • Weekdays 8am–Midnight ET
  • Weekends 10am–6pm ET