What your result means
The headline says which choice leaves you financially better off at the end of the period you entered — not which has the smaller monthly payment. Net worth if you buy is what the home would be worth after selling costs, minus the mortgage still owed. Net worth if you rent is the investment pot you would have built from the deposit you did not spend, plus every month renting was cheaper. Break-even is the first year buying pulls ahead; before it, selling costs and interest have not been earned back.
Your deposit is not free money
Almost every rent-vs-buy comparison sets a mortgage payment against a rent payment and stops there. That quietly assumes the deposit costs nothing — but money in a house is money not invested, and over ten years that opportunity cost runs to tens of thousands.
This tool invests the deposit and the buying fees on the renter's side from day one, and invests the monthly difference for whichever side is cheaper that year. Both paths spend the same budget, so the only thing being compared is where the money ended up.
How it works
The calculator runs your situation year by year. On the buying side it amortises the mortgage month by month, adds maintenance and insurance as a percentage of the home's current value, grows that value at your assumed rate, and at the end deducts selling costs and whatever is left on the mortgage. On the renting side it starts an investment pot holding the deposit plus the buying fees you did not pay, grows it at your assumed return, and adds rent that rises each year. Whichever path spends less in a given year invests the surplus, so both sides are always working with the same money. The comparison is net worth at the end, and the break-even year is the first year the buyer's figure overtakes the renter's.
How to use this calculator
- Enter the price of the home you would buy and the rent for a similar one — they must be genuinely comparable homes, or the answer is meaningless.
- Set your deposit, mortgage rate and term.
- Set how long you realistically expect to stay. This is the single most important input.
- Adjust the growth, rent-rise and investment-return assumptions to something you would defend.
- Read the break-even year, then re-run with a lower house-price growth to see how much the answer depends on it.
Formula
Rent = (deposit + buying fees + surplus invested) grown at your return
value = price × (1 + growth)years
rent in year y = monthly rent × 12 × (1 + rent rise)y−1
value is the home's worth in the year you sell; mortgage owed is the balance left after amortising month by month; surplus is the yearly difference between the two paths, invested by whichever side is cheaper that year; growth is your assumed annual house price change, which may be negative.
Example calculation
A £350,000 home with a £35,000 deposit at 4.8% over 25 years, against £1,400 a month in rent, staying 10 years. House prices and rents both rise 3% a year, investments return 5%, buying costs 4%, selling costs 2%, upkeep 1.5% of value a year:
Cash needed up front = £35,000 + 4% of £350,000 = £49,000
Net worth after 10 years if you buy = £229,684
Net worth after 10 years if you rent = £189,913
Buying wins by £39,770, breaking even in year 5
Change one assumption and the answer flips: set house price growth to 0% and renting wins by £67,176 over the same ten years. That is not a flaw in the tool — it is the actual sensitivity of the decision, and it is why a single confident answer from any rent-vs-buy calculator should be treated with suspicion.
Frequently asked questions
Is buying always better in the long run?＋
No. Buying wins when the home appreciates and you stay long enough to earn back the buying and selling costs — typically five years or more on these defaults. If prices are flat, renting and investing the deposit can win at any horizon, because the buyer is paying interest, upkeep and transaction fees while the renter's pot compounds. Set house price growth to zero and see for yourself.
Why does the answer change so much when I move one slider?＋
Because the decision genuinely is that sensitive. House price growth, your investment return and how long you stay each move the result by tens of thousands over ten years, and none of the three can be known in advance. Treat the tool as a way to find which assumption your decision depends on, not as a prediction.
What does this not account for?＋
Everything that is not cash. Security of tenure, the freedom to decorate, the risk of a landlord selling, the cost and stress of moving, mortgage arrangement fees, ground rent on a leasehold, and the tax treatment of investment gains where you live. Several of those matter more than the money to most people.
Related calculators
Assumptions & limitations
Every figure here comes from a simplified model. Keep these limits in mind when reading your result:
- Growth rates are constant. Real house prices and investment returns arrive in an unpredictable order, and the same average return in a different sequence gives a different answer.
- The mortgage rate is fixed for the whole term. In practice most deals are fixed for two to five years and then re-priced.
- Buying costs are entered as one percentage. Property transfer taxes are usually banded and non-linear, so check the rate for your price and jurisdiction rather than trusting a single figure.
- Investment returns are shown gross. Tax on gains, dividends or interest is not deducted, which flatters the renting side wherever those are taxed.
- Rent is assumed always payable and the home always occupied. Void periods, rent controls and maintenance surprises are not modelled.
- No mortgage arrangement fee, early repayment charge, ground rent or leasehold service charge is charged separately — fold those into the buying-cost and upkeep percentages.