Buying a home is £1,000 cheaper than renting Buying is cheaper than renting in 90pc of the top 50 towns in Britain, according to the latest data from Zoopla.co.uk. The property website found that servicing an interest-only mortgage on an average property in Britain costs £1,080 less per year than the cost of renting. Britons will find that the average asking rent for two bedroom flats is currently £668 per month, while the average asking price of equivalent properties currently stands at £138,769. Servicing an interest-only mortgage at an annual rate of 5pc would cost £578 per month, a saving of £90 per month compared to renting, leaving renters £1,080 per year worse off compared to owners For those living in York, Peterborough, Reading and Milton Keynes, renting is particularly expensive in comparison to buying, with York displaying a staggering 76.1pc rental premium. Of the top 50 towns in Britain, only in Swansea, Cambridge, Bournemouth, Dundee and Huddersfield can it be said to be more cost effective to rent than to buy. Indeed, in Swansea the rental discount; the difference between monthly rent and interest-only mortgage payment at 5pc per year is 9.5pc, and in Cambridge it stands at 7.6pc. Mark Harris, chief executive of mortgage broker SPF Private Clients, said: "Record low interest rates mean we are seeing the cheapest mortgages ever so this has to be good news for borrowers. However, the biggest barrier to home ownership is the deposit as first-time buyers struggle to drum up tens of thousands of pounds to get on the housing ladder. While the comparative cost of a mortgage rather than rent is interesting, there is little value in using an interest-only mortgage in the example as these are so difficult to come by, particularly at 90pc loan-to-value. Most lenders have a maximum LTV of 75pc on interest only so first-time buyers are much more likely to be on a repayment mortgage if they can get one at all - and these payments will be considerably higher. Most people would still prefer to buy a home than rent, even if it isn't cheaper as such. But the difficulties in getting a mortgage mean many are unable to. Rents are rising as demand for rental accommodation grows, making it even harder to save up for that deposit.