Answer
The statement, “Because of the mortgage interest tax deduction, it is possible to save money by buying a house rather than renting, even though rent payments are lower than mortgage payments”, makes sense.
Work Step by Step
Home mortgage owner can have deduction benefits like:
1. The interest paid on the mortgage.
2. The cost of all property taxes.
3. The cost of insuring the mortgage.
On the other hand, renting can get benefits on that transition. But, it cannot deduct the amount of rent from income taxes. So, buying a house can benefit the buyer from tax except for the rent payment.
Hence, the statement, “Because of the mortgage interest tax deduction, it is possible to save money by buying a house rather than renting, even though rent payments are lower than mortgage payments”,makes sense.
