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Rent vs Buy Calculator

Compare renting with buying the same home: what you’d have after you sell, including Stamp Duty, repairs and what your deposit could earn if you invested it.

£
£
£

A month

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Years before you’d sell or move

More options· Growth, investment return and the costs of owning
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Growth a year

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Growth a year

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Return a year

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% of value a year

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% of value a year

Years

£

A year

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A month: condo, strata or service charges

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Taxes and fees, % of price

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Agent and legal fees, % of value

Buying leaves you better off by

£49,044

After 7 years, once the home is sold and costs are paid

Buying pays off after
2 years
Owning, first month
£1,799/mo

What this means

Compare rent with the costs of owning you don’t get back, not the whole mortgage payment. In the first year those come to about £1,311 a month (mortgage interest, property tax, repairs and insurance), against rent of £1,300 a month.

Buying comes out ahead from year 2. Until then, the £6,000 it costs to buy, and the costs of selling, haven’t been earned back. You plan to stay long enough.

Next step

What you’d have, year by year

YearBuyingRenting
1£40,262£43,971
2£55,566£51,968
3£71,435£59,980
4£87,889£67,997
5£104,952£76,007
6£122,648£83,998
7£141,000£91,956

How it’s compared

  • Buying: what the home is worth when you sell, minus the mortgage left and the costs of selling.
  • Renting: the deposit and buying costs you’d have invested instead, growing at 5% a year.
  • Each month, whichever costs less invests the difference, so both spend the same.
Assumptions in this estimate
  • Rates, growth and returns stay the same every year. Mortgage insurance, tax breaks on home sales and tax on investment returns aren’t included: use an after-tax return for the investments.
  • Insurance and other owner costs rise with rent each year.
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How the calculator works

The calculator follows two people from the same starting point:

  • The buyer pays the deposit and costs to buy, then the mortgage, insurance and repairs. When they sell, they keep the home’s value minus the mortgage left and the costs of selling.
  • The renter invests the deposit and costs to buy instead, for example in a Stocks and Shares ISA, and pays rent.

Each month, whoever pays less invests the difference, so both spend the same. The result is who has more after the years you choose.

Example

A £300,000 home with a £30,000 deposit, at 4.6% over 25 years, against rent of £1,300 a month:

Amount
Owning, first month £1,799
Mortgage payment £1,516
After 7 years Buying ahead by about £49,000
Buying pays off after 2 years

Even with a 7% return on investments, buying comes out ahead by about £39,000 after 7 years, because the costs of owning that you don’t get back are about the same as rent.

What matters most

  • How long you stay: Stamp Duty and fees take time to earn back.
  • Your mortgage rate when your fix ends: the rate can change every 2 or 5 years.
  • House price growth: small changes make a big difference over time.

Work out the tax to buy with the Stamp Duty calculator, or read is renting dead money?

Last updated

Frequently asked questions

Is it cheaper to rent or buy in the UK?

It depends most on how long you stay, how fast house prices grow, and your mortgage rate. Buying and selling costs thousands, so the longer you stay, the more likely buying comes out ahead.

Isn’t rent just throwing money away?

Owning has costs you don’t get back too: mortgage interest, insurance, repairs and, for flats, service charges. Only the part of the payment that pays off the loan builds wealth. If those costs are more than rent and you invest the difference, renting can leave you better off.

Why isn’t council tax included?

Renters and owners both pay it, so it doesn’t change the answer. For a leasehold flat, add the service charge and ground rent under other owner costs.

What should I enter for costs to buy?

Stamp Duty (none for first-time buyers on homes up to £300,000 in England and Northern Ireland), plus legal fees, a survey and any mortgage fees. Our Stamp Duty calculator works out the tax.