How the comparison works
The calculator follows two households month by month for the years you choose. Both spend the same amount each month: the bigger of the buyer’s costs (the mortgage payment plus upkeep) and the rent. Whoever spends less puts the difference into savings, and the renter also invests the deposit and buying costs the buyer spent on day one.
At the end, the buyer has the home’s value, less the costs of selling and the mortgage still owed, plus any savings. The renter has their savings. The bigger number wins.
Buyer = home value − selling costs − mortgage left + buyer’s savings Renter = deposit and buying costs invested + monthly differences invested
Worked example
A 300,000 home with a 60,000 deposit, a 4.5% mortgage over 25 years, 5,000 of buying costs, upkeep of 1% of the value a year and 2% to sell; against rent of 1,200 a month rising 3% a year, with savings earning 4%. If the home rises 3% a year, the result after 10 years is buying ahead by 86,500, and it pulls ahead after 2 years.
| Change one thing | After 10 years |
|---|---|
| As above | buying ahead by 86,500 |
| The home’s value doesn’t rise | renting ahead by 9,076 |
| Savings earn 7%, homes rise 1% | renting ahead by 18,888 |
| You move after 3 years | buying ahead by 11,129 |
The answer turns on a few guesses: how fast homes rise, what savings earn and how long you stay. Try a pessimistic and an optimistic set before deciding.
How to read the result
- Ahead by: the difference between the buyer’s and the renter’s wealth at the end, before tax.
- Buying first comes out ahead after: the first year in which buying is ahead, which grows with high buying and selling costs.
- The year-by-year table shows both, so you can see where the lines cross.
Common mistakes
- Comparing rent with the mortgage payment alone: upkeep, insurance and the costs of buying and selling are real costs of owning.
- Forgetting the deposit could have earned something if it stayed invested.
- Assuming homes always rise quickly: try 0–1% a year too.
- Moving within a few years: buying and selling costs are then spread over a short time, so check a slower price rise too.
How to use it
- Type how many years you expect to stay.
- Type the home’s price, your deposit, the mortgage rate and term, and what buying, upkeep and selling cost.
- Type the rent and how fast it rises, and what your savings could earn.
- Change the guesses (home growth, savings rate) to see how sure the answer is.
Questions
Is it better to rent or buy?
It depends on how long you stay, how fast homes and rents rise, and what your savings earn. Buying and selling costs weigh most over a short stay, so there a small fall or a slow rise in prices can tip it to renting; the longer you stay, the more those costs are spread out. The calculator shows it for your own numbers.
What does the calculator assume?
Only what you type: the mortgage, buying and selling costs, upkeep as a share of the home’s value, how fast the home and the rent rise and what savings earn. Both households spend the same each month and invest whatever is left over. It is before tax.
Does it include tax or government schemes?
No. Taxes on buying, help-to-buy schemes and tax on investment growth differ from place to place, so it leaves them out; put any buying taxes into the costs of buying.
More calculators
Elsewhere on Yuzool
- Loan and mortgage spreadsheet in Gridwork
See all 39 calculators. Everything runs in your browser; nothing you type is sent anywhere.