Rent vs buy calculator
This is an honest comparison. It grows the renter's deposit and monthly saving as invested money, charges the buyer real costs, and finds the year buying pulls ahead on wealth.
How the two paths are compared
The buyer puts down a deposit plus upfront costs, pays a repayment mortgage and yearly maintenance, and builds equity as the balance falls and the value grows. Their wealth at any point is the home value after selling costs, minus the outstanding mortgage, plus anything they invested in months when buying was cheaper than renting.
The renter starts with the same deposit and buying costs, but invests that cash instead of committing it to a home. Each month they invest whatever they save by renting rather than buying, and the pot grows at the return you set. This is the opportunity cost most rent-versus-buy tools quietly ignore: money locked in a house is money not compounding elsewhere. Buying tends to win the longer you stay, because equity builds and level mortgage payments fall behind rising rent.
Worked example
Buy a £300,000 home with a £30,000 deposit and £8,000 of costs, against renting the same place for £1,200 a month. With 3% house growth, a 5% investment return and 3% rent rises, buying pulls ahead around year 3. After 25 years the buyer is worth £648,240 against the renter's £291,817. Raise the investment return or shorten the stay and renting can look better.
Common questions
Is it better to rent or buy?
It depends on how long you stay and what your money would earn if invested instead. On the example above, buying overtakes renting around year 3. Below that, the buying and selling costs and the tied-up deposit can leave a renter who invests the difference better off.
What is the opportunity cost of a deposit?
The deposit and upfront buying costs are money you could have invested instead of putting into a home. This tool gives that cash to the renter and grows it at your chosen return, so the comparison is honest rather than assuming the deposit is free.
Why does buying win eventually?
Two reasons. The mortgage balance falls while the property value tends to rise, so equity builds. And rent usually rises over time while a repayment mortgage stays level, so the buyer's housing cost falls behind rent in later years. Both push buyer wealth ahead the longer you stay.
What assumptions matter most?
House price growth, the investment return on the renter's money, and rent inflation. Small changes to these move the break-even year considerably, which is why the tool lets you set each one rather than building in a single assumption.
Does this include maintenance and selling costs?
Yes. The buyer pays yearly maintenance as a percentage of the home's value, and the wealth figure is after estate agent and legal selling costs. Ignoring these is the usual reason simple calculators flatter buying.