Should you rent or buy? This calculator compares the net financial position of two paths over the years you plan to stay: buying with a mortgage and building equity, versus renting and investing your deposit plus any monthly saving. It helps you see which is likely cheaper over your time horizon.
What each path is credited and charged
The calculator models both paths over the number of years you enter.
Buying: it grows the home’s value at your assumed home-price growth rate, tracks the mortgage balance paid down at the mortgage rate, and subtracts ownership costs such as maintenance. Your net buying position is the projected home equity (grown value minus remaining mortgage) less the ownership costs paid along the way.
Renting: it starts the renter with the deposit (and any monthly difference) invested at your assumed investment return, growing that pot over the period, while subtracting the rent paid — with rent rising at your assumed rent-growth rate each year.
It then compares the two end positions and reports which is higher and by how much. For simplicity it ignores purchase taxes, legal and transaction fees, insurance, and tax relief, so treat the result as directional.
The levers that swing the verdict
The rent-vs-buy decision is far more sensitive to a few variables than most people realise. Two scenarios with the same deposit and same monthly cost can produce completely opposite answers if the time horizon or return assumptions differ:
| Lever | Pushes toward |
|---|---|
| Longer stay | Buying |
| Higher home-price growth | Buying |
| Higher investment return | Renting |
| Higher rent growth | Buying |
| Higher deposit (relative to home price) | Buying sooner (less interest paid) |
| High transaction costs (stamp duty, solicitor) | Renting short-term |
Time horizon is the biggest factor. Buying has large up-front costs — stamp duty, solicitor fees, surveys — that are fixed regardless of how long you stay. If you sell after 2 years, those costs are spread over very few months and rarely recover. The longer you stay, the more those fixed costs are amortised across the period, and the more equity compounds. For most scenarios in the UK, around 4–6 years is where buying begins to beat renting all-in, though this varies significantly with local property prices and mortgage rates.
Investment return assumptions matter enormously. If the renter invests their deposit in a diversified global index fund, the return over 10 or 20 years may be higher than home-price appreciation in many UK regions. The calculator’s job is to make this comparison explicit, not to tell you which return is achievable.
A worked scenario
Take a £300,000 home with a £45,000 (15%) deposit, a 4.5% mortgage rate, and a plan to stay 6 years, against an equivalent rent of £1,300/month. Assume 3% annual home-price growth, 3% rent growth, 1% of the home’s value per year in maintenance, and a 5% return if the deposit were invested instead.
Buying: after 6 years the home is worth about £358,000 (3% compounding). The mortgage balance on the £255,000 loan has amortised down to roughly £230,000, so equity is about £128,000 — from which the model subtracts around £19,000 of accumulated maintenance (1% per year of a growing value).
Renting: the £45,000 deposit invested at 5% grows to about £60,000, while total rent paid over the 6 years (rising 3% annually) is roughly £101,000.
The comparison is between equity built net of ownership costs and investment growth net of rent paid — and in this scenario buying comes out ahead over 6 years, but flips if the stay drops to 2–3 years, where the renter’s smaller rent outlay and intact invested deposit beat the buyer’s barely-amortised mortgage. Enter your own numbers to see where your crossover year falls; the point of the tool is that the crossover is yours, not a national average.
What this calculator does not include
The model is deliberately simplified to show the structural trade-off without drowning in assumptions. It excludes:
- Stamp duty / SDLT — a meaningful one-off cost for buyers, especially above £250,000
- Solicitor, survey and mortgage arrangement fees — typically several thousand pounds
- Buildings and contents insurance — owners pay more
- Mortgage interest tax relief — removed for UK residential buyers after 2020
- Capital gains tax — not applicable on a primary residence in the UK, but relevant for second homes
- Council tax and utility responsibility differences — sometimes split differently in rental agreements
For a real decision, add these to the buying side costs or adjust the maintenance percentage to approximate them. Then take the result to a fee-free mortgage broker or independent financial adviser.
For the UK specifics the model omits, the official sources are the place to check current figures: Stamp Duty Land Tax rates and thresholds on GOV.UK (rates differ for first-time buyers and additional properties, and Scotland and Wales have their own land taxes), and the government-backed MoneyHelper guidance on the costs of buying a home, which itemises the survey, legal and moving costs that sit outside any rent-vs-buy model. Mortgage rates themselves move with the market — always compare against a current quote rather than a remembered figure.
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