Rent vs Buy Calculator
Compare the estimated cost, equity and net financial position of renting versus buying over the time you expect to stay.
Your rent vs buy comparison
Based on a 5-year comparison beginning January 2026. Results are an illustration using the costs and assumptions you entered.
Under the costs and assumptions you entered, the modelled buying and renting positions are similar after 5 years. With a result this close, lifestyle, flexibility and risk may matter more than the financial estimate alone.
- Property value, rent and investment return are all set to 0% — this is a deliberate no-growth baseline, not a forecast.
Upfront and monthly costs
Mortgage principal repaid becomes equity rather than being purely an unrecoverable cost — see the buyer-equity detail below.
| Metric | Buying | Renting |
|---|---|---|
| Modelled upfront cash at start | £29,000 | £500 |
| First-month housing cost | £1,495.33 | £1,220.00 |
| First-year total cash outflow | £17,944 | £14,640 |
| Average monthly cash cost over horizon | £1,495.33 | £1,220.00 |
| Total cash outflow over horizon | £89,720 | £73,200 |
Buyer-equity detail
| Starting property value | £250,000 |
|---|---|
| Estimated property value at horizon | £250,000 |
| Mortgage balance at sale | £199,305 |
| Estimated selling costs | £6,000 |
| Net sale proceeds | £44,695 |
| Modelled buyer savings from lower monthly costs | £0 |
| Estimated buyer end position | £44,695 |
Renter-investment detail
| Starting cash retained instead of buying | £29,000 |
|---|---|
| Renter setup costs (immediate outflow) | £500 |
| Value under assumed investment return | £28,500 |
| Modelled monthly cash-flow savings, with their own growth | £16,520 |
| Estimated renter end position | £45,020 |
Mortgage breakdown
| Purchase price | £250,000 |
|---|---|
| Deposit | £25,000 |
| Loan amount | £225,000 |
| Annual interest rate | 5% |
| Mortgage term | 25 years |
| Monthly payment | £1,315.33 |
| Balance at horizon | £199,305 |
| Interest paid within horizon | £53,225 |
| Principal repaid within horizon | £25,695 |
Estimated financial position over time
The buyer position moves from £19,000 at purchase to £44,695 at 5 years; the renter position moves from £28,500 to £45,020 over the same period. No stable buying break-even point appears within the horizon.
Year-by-year figures for the same comparison, including the buy-minus-rent difference at each year end.
| Year | Rent paid | Owner outflow | Property value | Mortgage balance | Buy position | Rent position | Difference |
|---|---|---|---|---|---|---|---|
| 1 | £14,640 | £17,944 | £250,000 | £220,361 | £23,639 | £31,804 | −£8,165 |
| 2 | £14,640 | £17,944 | £250,000 | £215,484 | £28,516 | £35,108 | −£6,592 |
| 3 | £14,640 | £17,944 | £250,000 | £210,358 | £33,642 | £38,412 | −£4,770 |
| 4 | £14,640 | £17,944 | £250,000 | £204,970 | £39,030 | £41,716 | −£2,685 |
| 5 | £14,640 | £17,944 | £250,000 | £199,305 | £44,695 | £45,020 | −£325 |
Illustrative sensitivity tests, not forecasts. Each row changes one assumption from your base figures and holds everything else the same.
| Scenario | Property change | Rent growth | Investment return | End difference (buy − rent) |
|---|---|---|---|---|
| Base assumptions | 0% | 0% | 0% | −£325 |
| Property change -2pts | -2% | 0% | 0% | −£23,864 |
| Property change +2pts | 2% | 0% | 0% | +£25,175 |
| Rent growth -1pt | 0% | -1% | 0% | −£2,075 |
| Rent growth +1pt | 0% | 1% | 0% | +£1,465 |
| Investment return +2pts | 0% | 0% | 2% | −£4,123 |
- Time horizon
- 5 years from January 2026
- Monthly rent today
- £1,200.00
- Purchase price
- £250,000
- Deposit
- £25,000
- Loan amount
- £225,000
- Estimated end position if buying
- £44,695
- Estimated end position if renting
- £45,020
- Result
- Similar (£325)
- Stable break-even point
- Not within 5 years
- Note
- This is an illustration built from the figures you entered, not a prediction or personal financial advice. Version 1 excludes mortgage-interest tax relief, capital-gains tax, property-tax deductions, investment tax and other tax effects.
How to use this calculator
- Choose your currency, expected time in the home, and a comparison start month.
- Enter your rent and any renter-only costs under "If you rent".
- Enter the purchase price, deposit and mortgage details under "If you buy".
- Enter one-off buying and moving costs, and ongoing ownership costs — this calculator does not add any of these automatically.
- Set your assumptions for property-value change, investment return and whether to invest each month's cash-flow difference. A 0% assumption is a transparent no-growth baseline, not a forecast.
- Read the estimated end position for buying and renting, the difference, and whether a stable break-even point appears within your horizon.
Results update as you change any figure. Use Reset to return to the worked example.
How does this calculator work?
This calculator runs a month-by-month model of renting and buying side by side, from the start of your comparison to the end of your chosen horizon. Buying is modelled as happening at the start of month 1, with a standard fixed-rate repayment mortgage if you enter a deposit below the purchase price, or as a cash purchase if you choose that option. Rent and owner-only costs grow monthly at the equivalent of your entered annual rates; a hypothetical sale — net of the remaining mortgage balance and estimated selling costs — is evaluated at every month, so a stable break-even point and a month-by-month chart can both be read from the same figures.
Whichever side costs less in a given month, the difference is added to that side's modelled savings or investment balance if you leave "Invest monthly cash-flow difference?" switched on. Both the renter's retained capital and this modelled saving grow at your entered investment return, so the comparison treats both sides symmetrically.
- L — the loan amount, the purchase price minus your deposit
- r — your annual interest rate divided by 12
- n — the mortgage term in months
- Property value compounds monthly at the equivalent of your entered annual rate
- Buyer end position = property value − mortgage balance − selling costs + modelled buyer savings
- Renter end position = retained starting capital, grown at your return, plus modelled monthly savings
For example, with a £250,000 home, a £25,000 deposit, a 5% mortgage rate over 25 years, £1,200-a-month rent and no assumed growth in property value, rent or investment return, buying and renting come out close to level after 5 years once upfront and selling costs are included — illustrating how upfront costs can offset several years of typical mortgage-versus-rent differences even before any growth assumption is applied.
What does this calculator assume?
- You buy at the start of month 1 and any sale happens at the end of your chosen horizon.
- The mortgage rate and payment are fixed for the whole term you enter.
- Rent, property value, investment return and ownership-cost growth stay constant at the annual rate you enter — there is no built-in market forecast.
- You enter any transaction tax, legal, closing, moving and ownership costs yourself; none are calculated automatically. UK buyers can use the UK Stamp Duty Calculator for an automatic Stamp Duty Land Tax estimate.
- Version 1 excludes mortgage-interest tax relief, capital-gains tax, property-tax deductions, investment tax and other tax effects.
- This is not a mortgage-affordability, lending, property-valuation or investment-recommendation tool, and it does not evaluate lifestyle, legal, location or job-security factors. For an illustrative UK borrowing and property-price range, see the UK Mortgage Affordability Calculator.
Important information
Important: This calculator compares the estimated financial outcome of renting and buying using your own costs and assumptions. It is an illustration, not a prediction of house prices, rents or investment returns, and not personal financial, tax, legal or investment advice.
Buying and renting involve personal, legal and financial considerations beyond this model. Results can change significantly with your moving date, mortgage rate, property-value change, rent increase, maintenance, taxes, fees and investment-return assumption. Check important decisions with qualified local professionals.