Home & Living

Rent vs Buy Calculator

Renting and buying rarely differ by as much as people assume once interest and rising rents are both included. This calculator projects both paths across your loan term and shows the gap.

What this calculator does

Projects two paths over your loan term: renting with yearly rent increases, and buying with a mortgage plus property appreciation. It subtracts the future property value from the buying costs, then compares the two totals.

How to interpret the result

The headline shows which option costs less over the period you entered, and by how much. Treat the gap as indicative, not decisive: a small gap either way means non-financial factors should decide, while a large gap warrants a closer look at your assumptions.

Assumptions

• The mortgage rate stays fixed for the full term.
• Rent rises at the steady percentage you enter every year.
• Property appreciates at a single constant rate, which is the least knowable input.

Limitations

• Excludes maintenance, property taxes, insurance, service charges and transaction fees — all real buying costs.
• Does not model selling costs at the end, which reduce the property value you keep.
• Ignores tax treatment of mortgage interest and capital gains, which vary by country.
• A variable-rate mortgage can change the buying side mid-term; this tool assumes fixed.

How it works

Rent is grown year by year at the increase you enter and summed across the loan term. Buying is treated as the down payment plus every mortgage payment, calculated with the standard amortisation formula, minus the property value after appreciation over the same period. The difference between those two totals is the comparison.

Worked example

A 320,000 property with 64,000 down at 5.5% over 25 years costs about 1,572 a month. Rent starting at 1,200 and rising 4% a year totals far more than a flat projection suggests, which is why long horizons tend to favour buying when appreciation holds up.

How to use it

1. Use the rent you pay today, not a national average.
2. Enter the interest rate you have actually been quoted; a single percentage point changes the result significantly.
3. Try a conservative appreciation rate such as 0–2% to see how the comparison behaves in a flat market.
4. Compare several loan durations before deciding.

Factors to consider

• Maintenance typically runs 1% of property value per year and is not included here.
• Buying costs — legal fees, taxes, agent fees — are paid up front and are rarely recovered quickly.
• How long you will stay matters more than the interest rate. Short stays usually favour renting.

Useful for

• Comparing renting versus buying in your specific city with your actual rent and a quoted rate.
• Seeing how sensitive the decision is to how long you plan to stay.
• Testing a cautious appreciation rate to check whether buying still makes sense in a flat market.

Frequently asked questions