Rent vs buy calculator
Compare the long-term cost of renting with buying, including upkeep, growth and the money you would invest.
About the rent vs buy calculator
Compare the long-term cost of renting with buying, including upkeep, growth and the money you would invest.
Part of SmartCalcy’s mortgage & real estate tools. It runs in your browser with no account, uses your own currency and units (change them at the top of the page), and gives estimates for information only, so check official guidance before you rely on a result.
How to use the rent vs buy calculator
What it calculates and when to use it
Compare the long-term net cost of renting with buying a similar home, counting upkeep, buying and selling costs, price growth and what the renter could earn by investing the deposit.
How to use it, step by step
- Enter the price, deposit, mortgage rate and term.
- Enter yearly running costs, buying and selling costs and price growth.
- Enter the rent for a similar home, its yearly increase and the return you could earn on your cash.
- Choose the number of years and compare the cumulative costs.
What each input means
- Tax, insurance and upkeep – A yearly percentage of the home’s value.
- Rent increase – How much rent rises each year.
- Return on invested cash – What the deposit and buying costs could earn if you rented.
How to read the results
- Net cost of buying – Costs paid minus what you would get back on sale after repaying the mortgage.
- Net cost of renting – Rent paid minus the growth earned on the cash you kept.
- Pulls ahead after – The first year buying becomes the cheaper option.
The formula
Net cost of buying = deposit + buying costs + mortgage payments + running costs − (sale value × (1 − selling costs) − mortgage balance). Net cost of renting = total rent − upfront cash × ((1 + return)^years − 1).
A worked example
For a 350,000 home with 20% down at 6.5%, rent of 1,700 a month and 3% growth, buying costs about 144,889 net after 10 years and renting about 185,438, so buying is cheaper by about 40,549 and pulls ahead after year 6.
Assumptions and limits
- The renter invests the upfront cash and nothing else.
- No tax relief, no maintenance surprises and no change in rates.
- The decision also depends on lifestyle and flexibility.
Common mistakes
- Treating the mortgage payment as the whole cost of owning.
- Using an unrealistic price growth rate.
Frequently asked questions
Why does buying lose in short periods?
Buying and selling costs are large, and early mortgage payments are mostly interest.
Is renting throwing money away?
Rent buys housing in the same way interest and upkeep do for owners. Compare total costs, as this tool does.
Related tools
Details
- Net cost of buying
- £144,889costs minus what you get back on sale
- Net cost of renting
- £185,438rent minus growth on the money you keep
- Buying pulls ahead after
- 6 years
Cumulative net cost
| Year | Buy | Rent |
|---|---|---|
| 1 | £32,379 | £16,550 |
| 5 | £87,599 | £87,033 |
| 10 | £144,889 | £185,438 |