Rent vs Buy Calculator
Compare the true cost of renting versus buying a property over a chosen time horizon, factoring in mortgage costs, house price growth, maintenance, and the equity you build up by owning.
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Renting
Buying
Related: Mortgage Payment · Rental Yield · House Price Appreciation
How the Rent vs Buy Calculator works
This calculator compares the total net cost of renting versus buying a property over a chosen time horizon of 5, 10, or 20 years. For renting, it totals the rent paid over the period, accounting for annual increases. For buying, it models mortgage payments, maintenance costs, and selling costs at exit, then subtracts the equity you have built up to arrive at a net cost figure.
The key insight is that buying a home is not simply about paying a mortgage instead of rent. Upfront costs including a deposit, Stamp Duty Land Tax, and legal fees can be substantial, and ongoing costs such as maintenance and building insurance must also be factored in. However, buying builds equity as you pay down the mortgage and as the property potentially grows in value.
Note that this is a simplified model. It does not include Stamp Duty, solicitor or survey fees, mortgage arrangement fees, or the opportunity cost of the deposit if invested elsewhere. For major financial decisions, always seek advice from a qualified mortgage adviser and financial planner.
Frequently asked questions
Is it better to rent or buy in the UK?
There is no universal answer — it depends on your personal circumstances, local property prices, mortgage rates, and how long you plan to stay. Buying builds equity over time and protects against rent increases, but involves high upfront costs including a deposit and Stamp Duty. Renting offers flexibility and lower initial outlay, but provides no equity stake. The longer you stay in a property, the more likely buying is to be cost-effective.
What costs should I include when comparing renting and buying?
When buying, costs include the deposit, Stamp Duty Land Tax, solicitor fees, survey costs, mortgage arrangement fees, ongoing mortgage payments, buildings insurance, maintenance and repairs, and selling costs when you exit. When renting, costs include monthly rent, tenancy deposit, and contents insurance. This calculator models the key ongoing costs but does not include upfront transaction costs such as Stamp Duty or solicitor fees.
How long do I need to own a home for it to be cheaper than renting?
In most UK markets, buyers typically need to hold a property for at least five years to recoup transaction costs and come out ahead of renting on a net basis. In high-price areas with fast-rising rents, this breakeven period may be shorter. In flat or falling markets with high purchase costs, it could take considerably longer.
Does buying always build more wealth than renting?
Not necessarily. If a renter invests the money they would otherwise have spent on a deposit and mortgage overpayments into diversified investments, they can accumulate significant wealth. Buying also carries concentration risk — your wealth is tied to a single asset. The outcome depends on house price growth, investment returns, and individual financial discipline.