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Rent vs Buy Calculator

Compare what renting and buying the same home could really cost over the years you plan to stay. The calculator weighs mortgage payments, fees and upkeep against the equity you build, and the rent you would pay against the growth a renter could earn on their deposit.

Inputs

Compare the net cost of renting with buying the same home over a chosen period.

Why net cost is the fair comparison

Comparing rent with a mortgage payment alone is misleading, because a buyer builds equity while a renter does not. This tool compares net cost: a buyer's total outgoings minus the equity they end up with, against a renter's total rent minus the investment growth on the deposit they never spent.

What tips the balance towards buying

Buying tends to win the longer you stay, because upfront fees are spread over more years and more of each payment builds equity. Higher house-price growth and lower mortgage rates also favour buying.

What tips the balance towards renting

Renting can win over short periods, when buying fees have little time to pay off, or when rents are low relative to prices, mortgage rates are high, or a renter can earn a strong return by investing the deposit instead.

Worked examples

Staying ten years

On a £280,000 home with a £42,000 deposit, buying often looks cheaper than renting over ten years once the equity built is taken into account, although the gap depends heavily on house-price growth.

Moving within three years

Over a short stay, buying fees and Stamp Duty have little time to pay off, so renting can come out ahead even if prices rise.

How we calculate this

Buying outgoings include the deposit, buying costs, mortgage payments over the period and yearly maintenance. The remaining mortgage balance and a grown property value are used to work out the equity built, which is subtracted to give the net cost of buying.

Renting cost is the total rent over the period, growing each year, minus the investment growth a renter earns on the deposit and buying costs they did not spend.

Results assume the inputs hold steady for the whole period and exclude moving costs, ground rent and personal tax. Small changes in growth and rate assumptions can change which option wins.

Official sources

FAQs

Is buying always cheaper than renting?

No. Over short periods, or when prices are flat and rents are low, renting can be cheaper. Buying tends to improve the longer you stay in the home.

Does it include Stamp Duty?

Indirectly, through the buying costs percentage. Set it to reflect Stamp Duty plus legal and survey fees for your purchase, or use our Stamp Duty calculators for an exact figure.

What investment return should a renter assume?

Use a realistic long-term return for how the deposit would actually be invested. A higher assumed return makes renting look relatively better.

Why does the result change so much?

Rent versus buy is very sensitive to house-price growth, mortgage rates and how long you stay. Trying a range of assumptions is more useful than relying on a single answer.

Property

Renting vs Buying a Home

Compare renting and buying a home, including flexibility, deposit, repairs and long-term equity.

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Read the full comparison

Buying builds equity and can lower housing costs later in life, but it comes with a large deposit, transaction costs and maintenance responsibility. Renting does not build ownership, but it can be financially sensible when your plans, job or location are still uncertain.

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