Rent or Buy Calculator
Compare the true long-term cost of renting versus buying a home in the UK.
What this calculator does
This rent or buy calculator compares the total cost of renting against the total cost of owning the same property over time. Enter the property price, your deposit, the mortgage rate, and the rent on a comparable home, and it returns the monthly cost of ownership, the monthly rent, and the year at which buying moves ahead.
The year-by-year table matters more than the headline. It accumulates rent paid on one side and ownership costs net of equity built on the other. Ownership starts a long way behind because of the deposit and the upfront costs of buying, then closes as capital repayment builds and rent rises around it.
When to use it
The natural moment is when a tenancy is coming up for renewal with an increase attached, and you are weighing another year of renting against an offer on somewhere. Pick the number of years you are confident you will stay and read that row rather than the headline break-even.
It also helps with the choice between a leasehold flat and a freehold house at a similar price, where service charges tilt the ownership side considerably. And it is genuinely useful for deciding not to buy: if there is a real chance you relocate within three years, the table will show ownership still behind, and renting while keeping your deposit invested is the sounder call.
Understanding the inputs
Property price and deposit set the mortgage and the LTV band, which drives the rate you should enter. The deposit also serves as the sum a renter is assumed to invest at five percent a year, so it appears on both sides of the comparison.
Comparable monthly rent should be what you would pay for somewhere you would actually live in, not the cheapest listing nearby. Use a live product rate rather than the base rate, and bear in mind it usually fixes for two to five years. The model applies general maintenance and tax assumptions, so if you are buying a leasehold flat with a £2,400 annual service charge, add £200 a month to the ownership side mentally before reading the result.
How is this calculated?
Compare total cost of ownership vs total renting cost over the time horizon.
A worked example
Take a £320,000 property with a 10 percent deposit of £32,000, leaving £288,000 borrowed at 5.25 percent over 25 years. The monthly repayment is roughly £1,726. Add buildings insurance at around £25 a month and maintenance at one percent of value, or about £267 a month, and ownership costs roughly £2,018 monthly.
Against £1,400 rent, that is around £618 a month more, and the £32,000 deposit gives up about £1,600 a year in investment returns. Upfront, a home mover pays £6,000 in stamp duty plus roughly £2,500 in legal and survey costs. Against that, the first year of repayments clears about £5,600 of capital, and rising rents narrow the monthly gap every year the comparison runs.
Limitations and assumptions
The calculator applies fixed assumptions for maintenance and investment returns and does not let you vary house price growth or rent inflation, which are the two figures that most move the answer. It excludes stamp duty, conveyancing, survey, and product fees on the way in, and estate agent fees of one to three percent plus VAT on the way out.
It also assumes a single rate for the whole term, which does not match a UK market where most deals fix for two to five years before reverting to a standard variable rate. Leasehold costs, ground rent, cladding and EWS1 issues, and the risk of a short lease are not modelled and can dominate the economics of a flat. Use the break-even year as one input, and get quotes for the upfront costs before committing.
Common Questions
- How long do I need to own before buying beats renting?
- In the UK the break-even is often five to seven years, driven mainly by stamp duty. A home mover buying at £320,000 pays £6,000 in stamp duty before any other cost, and that has to be earned back through equity and avoided rent before ownership pulls ahead.
- What upfront costs does a buyer face that a renter does not?
- Stamp duty, conveyancing and searches of roughly £1,500 to £2,500, a survey from £400 for a condition report to £1,000 or more for a full building survey, any mortgage product fee of up to £1,999, and removals. On a mid-priced purchase these routinely total £9,000 to £12,000.
- Does the calculator account for service charges on a flat?
- Not specifically — it applies a general maintenance assumption. Leasehold flats carry service charges and ground rent that commonly run £1,500 to £3,000 a year and can rise sharply, and a lease under about 80 years triggers expensive extension costs. Add those to the ownership side yourself before reading the break-even.
- What happens when my fixed deal ends?
- You move to the lender's standard variable rate unless you remortgage, and SVRs typically sit two to three percentage points above the best fixed deals. The calculator assumes one rate throughout, so if you are on a two-year fix, treat the later years of the table as optimistic unless you plan to switch.
- Is renting really dead money?
- No. Rent buys housing and mobility. The equivalent unrecoverable owner costs — mortgage interest, stamp duty, maintenance, insurance, and the agent and legal fees on selling — are also gone for good. Compare unrecoverable cost against unrecoverable cost, not rent against the whole repayment.
- How much does rent rise compared with a fixed mortgage?
- UK private rents rose sharply in recent years, well ahead of the long-run average of around three percent. A repayment mortgage on a fixed deal holds its monthly figure for the deal period and then resets, while rent typically resets at every renewal. That asymmetry is the strongest financial argument for buying.
- Does buying make sense if I might move for work?
- Rarely inside three years. Round-trip costs — stamp duty in, estate agent fees of one to three percent plus VAT and legal costs out — commonly reach eight percent of the price. Renting preserves the option to take a job elsewhere without a sale hanging over you.
- What about the deposit I would otherwise have invested?
- The model assumes it earns five percent a year if you rent instead. A £32,000 deposit held in a stocks and shares ISA would generate about £1,600 in the first year, tax free. That opportunity cost is real and belongs on the renting side of the ledger.
- Do first-time buyers reach break-even faster?
- Yes, usually. First-time buyer relief means no stamp duty up to £300,000 and five percent on the portion between £300,000 and £500,000, with no relief at all above £500,000. Removing several thousand pounds of upfront tax can pull the break-even forward by a year or more.
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