How to calculate whether to rent or buy
Buying only wins once ownership costs plus the opportunity cost of your deposit are beaten by the equity and price growth you build. The answer is a break-even number of years, not a yes or no.
The rule
Compare total rent paid vs (interest + fees + maintenance + transaction costs − equity built − price growth)
Do it automatically — Rent vs buyStep by step
- 1Total the rent you would pay over the period, allowing for annual increases.
- 2Total ownership costs: mortgage interest, maintenance, insurance, service charges and taxes.
- 3Add buying and selling transaction costs, which are the main reason short stays favour renting.
- 4Add the return your deposit could have earned if invested instead, then compare the two totals.
What trips people up
- • Under about five years, transaction costs usually make buying the worse deal.
- • Maintenance is routinely underestimated — budget around 1% of property value a year.
Common questions
Is rent always 'dead money'?
No — mortgage interest, fees and maintenance are equally unrecoverable.
What if prices fall?
With a small deposit, a modest fall can wipe out your equity, so the break-even lengthens considerably.
Skip the maths
Compare renting to buying over a chosen horizon, including fees and opportunity cost.
Open the break-even years tool