Rent vs Buy Cost Comparison Calculator
Explore renting and buying over the same number of years. Compare mortgage costs, ownership expenses, sale equity and what a renter could retain by investing the deposit and monthly difference.
How to use Rent vs Buy Cost Comparison Calculator
1. Choose the currency used for results. 2. Enter matching homes and a realistic time horizon. Add buying taxes and fees yourself, use a nominal mortgage interest rate, and review the growth and savings assumptions carefully. 3. Change a value to update the results, or select Calculate. Review the chart and notes with the total. 4. Use Copy results, Share results or Download result graphic to keep the answer. Shared links include your figures. 5. Reset restores the editable example inputs.
Why use this tool?
Rent and a mortgage payment are different kinds of spending. A mortgage payment can build equity, but buying also uses a deposit and brings maintenance and transaction costs. Renting can leave money available to save, depending on the monthly difference. This calculator makes those assumptions visible rather than declaring that renting or buying is always better. Try shorter and longer stays, lower property growth and a higher mortgage rate to see which assumptions drive the result. It is a scenario model, not a mortgage offer or a forecast of house prices.
How the calculation works
Mortgage payments are calculated using a constant nominal annual rate divided by twelve. Each month’s interest is charged to the remaining balance before the payment reduces it. The loan is paid off at the end of its term. Ownership outgoings include the deposit, entered buying fees, mortgage payments and entered annual ownership costs. Projected buyer equity is the assumed future sale price after selling costs, minus remaining mortgage debt. Buying net housing cost is total ownership outgoings minus that sale equity. Rent rises at the entered annual rate. Renter savings start with the deposit and buying fees, earn the entered effective annual investment return converted to a monthly rate, and receive the monthly ownership-outgoing-minus-rent difference at month-end. A negative savings balance indicates a funding shortfall, not a borrowing-interest model.
Example
Suppose a £100,000 home is bought with a £20,000 deposit and an £80,000 ten-year mortgage at 0% for a five-year comparison. With no fees, growth or ownership extras, monthly repayment is about £666.67 and £40,000 of debt remains after five years. Buyer equity is £60,000. A renter paying £500 a month with 0% investment return would retain £30,000 from the deposit and monthly difference. These deliberately simple assumptions illustrate the model, not an available mortgage.
Practical tip
Enter costs such as legal fees, property taxes and selling fees for your own location. Include only ownership expenses that differ from renting; counting shared costs on one side can distort the comparison.
Frequently asked questions
Does the calculator work out Stamp Duty or another property tax?
No. Enter the tax and fees that apply to your circumstances. Property-tax rules depend on location, price and buyer status, and are not inferred here.
Are the projected property and investment returns guaranteed?
No. They are editable scenario assumptions. Actual returns, tax, fees and the timing of a move can change the outcome substantially.
Why are renter savings sometimes negative?
The model assumes the renter saves or spends the difference between owner outgoings and rent each month. If rent is sufficiently higher, that hypothetical pot can become negative. The tool flags the shortfall; it does not model how borrowing would fund it.