Rent vs Buy Analyzer — Net Worth Comparison Over Time

Home price

Down payment

Mortgage rate

Mortgage term

Current monthly rent

Annual rent increase

Annual home appreciation

Annual maintenance cost

Annual property tax

Investment return rate

Time horizon

🏠 Buying

Total mortgage payments

Total maintenance

Total property tax

Home value at end

Net worth from buying

🏢 Renting

Total rent paid

Down payment invested

Investment growth

Savings from lower costs

Net worth from renting

About the Rent vs Buy Calculator

What it models

Compares the estimated net financial position of renting versus buying a home over a chosen time horizon, accounting for mortgage payments, house price growth, investment returns on the deposit, and rental costs.

Why it's complex

Buying builds equity but ties up capital; renting preserves flexibility and lets you invest the deposit elsewhere. The better outcome depends on local house price growth, mortgage rates, and how long you stay.

House price growth — higher growth favours buying; flat or falling markets may favour renting
Investment return — if you rent, the deposit capital can be invested; the return rate matters
Time horizon — buying typically benefits longer stays; transaction costs make short stays expensive

The emotional dimension of the rent vs buy decision

Financial analysis alone rarely determines the rent vs buy decision. Stability (not being subject to rent increases or landlord decisions), the freedom to decorate and renovate, building equity for retirement, and the social expectation of homeownership are all real factors. Equally, flexibility to move for work or lifestyle, freedom from maintenance responsibility, and the ability to invest the deposit elsewhere are genuine advantages of renting.

Flexibility vs stability — renting offers geographic flexibility; buying offers security of tenure
Emotional ownership — ability to customise, decorate, and make a home has real value not captured in financial models
Maintenance responsibility — home ownership requires time and money for repairs; renters are insulated from this
Life stage — buying makes most financial sense when you plan to stay 5+ years and have a stable income

Frequently Asked Questions

What costs does this calculator include?

Buying costs include mortgage payments (principal + interest), maintenance (typically 1% of home value/year), and property taxes. Renting costs include monthly rent with annual increases. The calculator also accounts for home appreciation, the opportunity cost of the down payment, and investment returns on any monthly savings from renting.

Why might renting win financially?

In expensive markets, the combination of a large down payment, high mortgage payments, maintenance, and property taxes can exceed rent costs. If the down payment had been invested instead, the investment returns might outpace home appreciation — especially over shorter time horizons.

What is the price-to-rent ratio?

The price-to-rent ratio compares a property's purchase price to its annual rent. A ratio above 20 typically favours renting; below 15 typically favours buying. Ratios between 15–20 depend on individual circumstances like how long you plan to stay and your investment alternatives.

How does the mortgage interest tax deduction affect the calculation?

In some countries, mortgage interest payments are tax-deductible, which reduces the effective cost of buying. This varies significantly by country and personal tax situation — consult a tax adviser for your specific circumstances.

Why does the time horizon matter so much?

Buying has high upfront costs (stamp duty, legal fees, surveys) that take years to recoup. If you plan to move within 2–3 years, renting is almost always cheaper once you account for those costs. The longer you stay in a property, the more buying tends to make financial sense.