Rent vs Buy Calculator

About this calculator

Should you keep renting or buy a home? Enter the price, deposit, mortgage, running costs and the rent for a similar home, and see the net cost of each choice over the years you pick, plus the year from which buying comes out ahead, if it does.

How it works

• The mortgage is the price minus the deposit, repaid in equal monthly payments with interest at one twelfth of the yearly rate, as in the Loan EMI Calculator. The loan balance falls month by month.
• Owning costs each month are the mortgage payment plus property tax and maintenance (percentages of the home value at the start of each year, spread over 12 months) plus one twelfth of the yearly insurance. Rent rises once a year by the rent increase.
• Both choices start with the same cash and spend the same each month. The renter invests the deposit and buying costs, and each month whichever side pays less invests the difference. Investments grow monthly at the rate that adds up to the yearly return you enter.
• The home is assumed to be sold at the end: its value grows each year by the change you enter, selling costs come off, and the loan still owed is repaid from the sale.
• Net cost of buying is everything paid to own minus the money from the sale minus any investment growth. Net cost of renting is the rent paid minus investment growth. A negative net cost means you end with more than you paid. Break-even is the first year-end from which buying stays cheaper to the end of the period.

This tool gives general figures, not financial, tax or legal advice. Real offers include fees and rules that are not modelled here.

Common questions

Which numbers should I enter?

Your own: a real price and rent for comparable homes, a mortgage offer, your local property tax and the return you could realistically earn. The starting numbers are examples only, not market rates.

Are taxes on income or gains included?

No. Mortgage tax relief, capital gains tax and tax on investment returns depend on where you live, so they are left out. Check them with an adviser.

Why does the investment return matter so much?

Money tied up in a deposit cannot be invested elsewhere. A higher return makes renting and investing look better; a lower one favours buying.