Rent vs Buy Calculator

The rent-vs-buy decision depends on many variables: property prices, rental costs, mortgage rates, house price growth, investment returns on the alternative use of a deposit, and how long you plan to stay. This calculator models both scenarios over your chosen time horizon to show which is financially better.

The buying scenario includes mortgage payments, deposit opportunity cost, stamp duty, maintenance (1-2% of property value per year), insurance and transaction costs when selling. The renting scenario includes rent (with assumed annual increases), renters' insurance and the investment return on cash that would otherwise go towards a deposit and purchase costs.

The result shows the net wealth position under each scenario at each year. In the early years, renting and investing often wins because of the high upfront costs of buying. Over longer periods, buying typically wins due to house price appreciation and the forced saving element of a repayment mortgage.

When does buying beat renting in the UK? Generally if you'll stay 5+ years. The 'breakeven' depends on: property growth rate, rent inflation, interest rates, transaction costs (5-10% on buy, 0% on rent). Rule of thumb (2026 UK conditions): if your monthly mortgage + maintenance + insurance is less than 130% of equivalent rent, AND you'll stay 5+ years, AND you have 10%+ deposit — buying wins. Below 5-year horizons, transaction costs (SDLT, legal, agent fees) usually negate any benefit.

Hidden costs of homeownership. Beyond mortgage: building insurance (£200-400/year), maintenance (1% property value/year sustained = £2k on £200k home), service charges (£1k-£5k on flats), ground rent (£100-£500 on leasehold), boiler service (£100), repairs (variable — boiler replacement £3k, roof £8k, kitchen £10k). Rough budget: 2-3% of property value/year for total cost of ownership. Many first-time buyers underestimate maintenance and end up financially stretched.

Rent-vs-buy in different UK markets. London (high property costs, lower rental yields ~4%): buying often takes 10+ years to break even due to high transaction costs. Manchester (£200k average, £1k rent): often 4-5 years. Sheffield (£170k, £850 rent): 4 years. Rural Cornwall: variable. Use this calculator's local data — entering YOUR area-specific numbers is essential. Generalised rent-vs-buy rules can mislead because UK property markets are highly localised.

The opportunity cost angle. If you rent and invest your would-be deposit in a Stocks & Shares ISA averaging 7% return, you might be financially better off than buying with the same money — particularly in stagnant property markets. £50k deposit at 7% over 25 years = £272k. £50k deposit on £250k home growing at 3%/year = £523k home value (but £200k still owed at mortgage end if interest-only). Most buy-vs-rent calculators undervalue the opportunity cost of capital.