How does this rent vs buy calculator decide which is cheaper?

It runs a full month-by-month simulation of both paths and compares net worth each year. The buyer's net worth is their home equity if they sold that year, after selling costs. The renter's net worth is a portfolio that starts with the deposit and upfront buying costs the buyer paid, plus every month's cash-flow saving, all compounded at the investment return you set. Whichever number is higher is the better financial outcome at that point.

What is the breakeven point?

The breakeven point is the first year your buying net worth overtakes your renting-and-investing net worth and stays ahead for the rest of the period. Before breakeven, the upfront deposit, stamp duty and buying fees usually keep renting ahead; after it, paid-down equity and home appreciation pull buying in front.

Why does the renter invest the deposit in this model?

A fair comparison has to account for opportunity cost. The money a buyer locks into a deposit and buying costs could instead be invested by a renter. The model assumes the renter invests exactly that lump sum, then invests any further monthly saving whenever owning costs more than renting, compounding it at your chosen return rate.

Does it include stamp duty, maintenance and selling costs?

Yes. Upfront buying costs (stamp duty, legal, survey) are entered as a percentage of price; selling costs (agent and legal) as a percentage of the eventual sale value; and ongoing maintenance and property tax as annual percentages of the home value, plus a flat buildings-insurance figure. These are the costs that most simple rent-vs-buy tools ignore.

Should I adjust the figures for inflation?

You can. The today's-money toggle discounts every future figure by your inflation rate so you compare wealth in current purchasing power. It does not change which option wins — both sides are discounted equally — but it makes the headline numbers easier to interpret.

Is buying always better than renting if I stay long enough?

Usually, but not always. If home appreciation is low, mortgage rates are high, or investment returns are strong, renting and investing can stay ahead for a very long time — sometimes the whole period, in which case the tool reports no breakeven. Try a few scenarios; small changes to appreciation and investment return often flip the result.

Rent vs Buy Comparison Calculator

A complete rent vs buy comparison that goes far beyond a single monthly-payment number. It runs a month-by-month simulation of both paths over the years you plan to stay, then compares your net worth each year so you can see not just which option is cheaper today, but exactly when — if ever — buying overtakes renting. The result is a clear breakeven year, an interactive net-worth chart, and a year-by-year table you can export.

The honest version of this question is never “is my rent more than a mortgage payment”. It is “after I account for the deposit I tie up, the stamp duty and fees on the way in, the maintenance and tax while I own, the agent fees on the way out, and the investment return I give up by not renting and investing the difference — am I actually ahead?”. This tool answers that, and lets you stress-test every assumption.

How it works

Each month the model charges interest on the outstanding mortgage, applies your fixed repayment to clear principal, and adds the buyer’s ongoing costs — maintenance, property tax and insurance — to get a true cost of owning. On the renting side it tracks your rent (escalating each year) plus contents insurance. The renter is assumed to invest the buyer’s upfront outlay (deposit plus buying costs) and any monthly cash-flow saving, all compounding at the investment return you choose.

At the end of each year the home is revalued by your appreciation rate and rent is escalated. The buyer’s net worth is the home equity they would walk away with if they sold — value minus the remaining mortgage minus selling costs. The renter’s net worth is simply their investment portfolio. The breakeven year is the first year buying’s net worth overtakes renting’s and stays ahead. If it never does within your horizon, the tool says so — which is itself a useful answer.

Example

A £300,000 home with a 20% deposit, a 5% mortgage over 25 years, 3% annual appreciation and 3% selling costs, compared against £1,300/month rent growing 3% a year, with the renter investing the freed-up cash at 5%:

Year	Buy net worth	Rent + invest	Verdict
3	lower	higher	renting ahead
~7	crosses over	—	breakeven
10	higher	lower	buying ahead

Drop appreciation to 1% or push investment return to 8% and the breakeven moves out years — sometimes past the end of the period entirely. That sensitivity is the whole point: change the inputs and watch the breakeven move. Every figure is calculated in your browser and nothing is uploaded.