Rent vs Buy Calculator

How the comparison works

The calculator follows two versions of you over the years you choose and compares what each would be worth. The buyer pays the deposit and buying costs, then a monthly mortgage repayment plus maintenance and insurance. The renter pays rent and invests the money the buyer spent up front.

Each month it compares the buyer's outgoings with the rent. If owning costs more, the renter invests the difference. If rent costs more, the buyer invests the difference instead. Investments grow at your chosen return, compounded monthly. Property value and rent rise once a year, and owner costs are recalculated from the new value.

At the end of each year, the buyer's wealth is the home's value minus selling costs, minus the mortgage still owed, plus any investments. The renter's wealth is their investment pot. Buying breaks even in the first year the buyer's figure matches or passes the renter's.

Stamp duty is worked out for you

Choose where the home is and which kind of buyer you are, and the calculator works out Stamp Duty Land Tax in England and Northern Ireland, Land and Buildings Transaction Tax in Scotland or Land Transaction Tax in Wales from the official rates for the current tax year. First-time buyer relief and the higher rates on additional properties are applied where they fit. Add your solicitor, survey and any mortgage fees in the other buying costs box, and the result shows the stamp duty included.

A worked example

Take a £300,000 home in England with a 10% deposit, a 4.5% mortgage over 25 years and a similar home renting for £1,200 a month. Use 3% yearly growth in property value and rent, a 5% investment return, maintenance and insurance of 0.5% a year, £2,500 of other buying costs and selling costs of 2%.

As a home mover, stamp duty is £5,000, so the deposit and buying costs total £37,500. The monthly repayment is £1,500.75. After 10 years the buyer is worth £198,934 and the renter £104,758, so buying is ahead by £94,176 and breaks even in year 2. A first-time buyer would pay no stamp duty on this price, which puts buying ahead by £102,320.

Why the assumptions decide the answer

This result is not a prediction. It depends heavily on the growth and return rates you choose. In the example, cutting property price growth from 3% to 1% a year shrinks buying's lead to £25,576 and pushes break-even back to year 6. Raising the investment return to 7% instead narrows the lead to £75,823. Nobody knows what house prices or markets will do over ten years, so run a cautious and an optimistic set of rates and see whether the answer flips.

The comparison period matters too. Stamp duty, fees and selling costs take time to recover, so a short stay favours renting more than a long one.

Choosing your inputs

Maintenance and insurance: add buildings insurance and a realistic yearly allowance for repairs, then divide by the price. For a flat, include the service charge.

Other buying costs: MoneyHelper's guide to buying and moving costs lists what to budget for, including legal fees, searches, surveys and mortgage arrangement fees.

Selling costs: include estate agent fees and the legal costs of selling.

Mortgage rate: if your deal is fixed for only a few years, the rate will change when it ends. Use a rate you think is realistic over the whole comparison period, not just the current deal.

The calculation also only holds if the renter really does invest the difference every month. To check the stamp duty band by band for a different price or nation, use the stamp duty calculator. If you need to build a deposit first, the savings goal calculator shows how much to save each month.