Calculator
Rent vs. Buy Calculator
Should you rent or buy? Compare the true total cost over your time horizon — accounting for mortgage interest, maintenance, transaction fees, and the opportunity cost of your deposit invested instead.
The property
Renting alternative
Return you'd earn investing the deposit (and any monthly savings) instead of buying. 6% is a reasonable long-run global-equity assumption.
Time horizon & costs
Repairs, buildings insurance, ground rent, service charge. 1–1.5% of property value is a reasonable rule of thumb.
All maths runs in your browser. Numbers are estimates — your actual outcome depends on rates, markets, and how long you stay put.
Where your money goes if you BUY
Where your money goes if you RENT
"Net cost" = total cash spent − asset value at the end. Buying builds equity but locks up capital; renting frees that capital to invest. The right answer depends on how long you stay, returns, and house-price growth.
How the Rent vs. Buy calculator works
Comparing rent vs buy on monthly cost alone is misleading — it ignores the deposit you tie up in the house, the upfront costs of buying, ongoing maintenance, and the equity you build over time. This calculator runs both scenarios in parallel for the time horizon you choose and shows the cumulative cost of each, plus the breakeven year.
The buying side
- Upfront: deposit + stamp duty + buying fees
- Ongoing: mortgage payments + maintenance + insurance + service charges
- Asset built: equity from mortgage paydown plus property price growth
- Exit costs: selling fees deducted from the final sale price
The renting side
- Ongoing: rent (which we grow each year by your inflation/rent-rise rate)
- Investment: the deposit and any monthly cash-flow advantage are invested at your chosen rate of return
- Asset built: the compounded value of that invested money at the end of the horizon
Worked example
Scenario: £350k home vs £1,500/mo rent, 10-year horizon, £50k deposit, 4.75% mortgage, 3% property growth, 3% rent rises, 7% investment return.
Buyer: ends with a home worth ~£470k, less remaining mortgage of ~£235k = ~£235k equity, having spent ~£205k on payments + costs.
Renter: spends ~£206k on rent, but the £50k deposit invested at 7% becomes ~£98k.
Net wealth difference: buyer ahead by ~£140k, mainly from the property equity. Cut property growth to 0% and the gap closes sharply.
Frequently asked questions
Is it better to rent or buy a home?
There's no universal answer — it depends on how long you'll stay, local rent-to-price ratios, mortgage rates, and the return you'd get on the deposit if you invested it instead. Buying typically wins over long horizons (10+ years) in stable markets; renting can win when rates are high, you move often, or you can earn strong investment returns on the deposit.
What is the opportunity cost of a house deposit?
The opportunity cost is what your deposit would have earned invested elsewhere — typically in a diversified equity index. If a £50,000 deposit could earn 7% per year invested, that's £3,500 in the first year alone that buying 'costs' you. Over 25 years, the difference between earning 7% and being locked into property growth can be vast.
What costs of buying do people forget?
Stamp duty (or transfer tax in the US), legal fees, surveys, mortgage arrangement fees, ongoing maintenance (typically 1-2% of value per year), buildings insurance, ground rent or service charges on flats, and selling costs at the other end. These can add 3-5% to the buying price and 1-2% per year ongoing.
How does inflation affect rent vs buy?
Rent rises with inflation (or faster); a fixed-rate mortgage payment stays roughly flat in nominal terms, so its real cost falls each year. This makes buying more attractive in high-inflation environments — but only if you can lock in the rate, and only if you stay long enough for the savings to outpace the upfront costs.
What's the breakeven point?
The breakeven is the number of years at which the cumulative cost of buying drops below the cumulative cost of renting (factoring in property equity built and the investment growth on the renter's saved deposit). For most UK markets the breakeven is 5-10 years; below that, renting is usually cheaper.
Does this account for property price growth?
Yes — the calculator lets you set an annual property growth rate, which builds equity for the buyer in addition to mortgage paydown. Setting this to 0% gives you a worst-case (no appreciation) view; long-run UK averages have been around 3-4% nominal, but past performance doesn't guarantee future returns.