Rent vs Buy Calculator

Cripto Adicto, finance and investing content creator
Written by Last updated:

Work out whether renting or buying leaves you richer. This rent vs buy calculator compares the true net cost of both — including the money you would have invested instead of tying it up in a deposit — and tells you your break-even year.

Your numbers

Net cost of buying—
Net cost of renting—
Verdict—
Break-even year—
Home equity at the end—
Total interest paid—

Rent vs Buy: What This Calculator Actually Compares

Most rent vs buy comparisons are rigged. They line up a mortgage payment against a rent cheque, notice the mortgage builds equity, and declare buying the winner. That skips the two things that decide the answer.

The first is opportunity cost. A deposit is not free money sitting still — it is capital that could be earning a return somewhere else. Tie €70,000 into a property and you give up whatever that €70,000 would have made in an index fund. The second is transaction cost. Buying and selling a home is brutally expensive, and those costs are paid whether or not the property rises in value.

This calculator handles both. It tracks the net cost of buying (everything you pay in, minus the equity you walk away with after selling costs) against the net cost of renting (rent paid, minus the investment portfolio you built with the deposit and the monthly difference). Whichever number is lower, wins.

The Break-Even Year Is the Whole Answer

The single most useful output here is the break-even year — the point where buying stops being more expensive than renting. Before it, renting is ahead. After it, owning pulls away.

This matters because it converts a vague identity question ("am I the sort of person who owns?") into a concrete one: how long will I stay? If your break-even is year nine and you expect to move in four, the maths has answered you. The transaction costs never get amortised, and you would have been better off renting and investing the difference.

Why Buying Costs Dominate the Early Years

Buying costs are front-loaded and non-recoverable. Pay 10% to get in and 5% to get out and you are 15% underwater the day you sign. At 3% annual appreciation, that takes roughly five years just to claw back — before you have gained a cent.

This is also why mortgage interest hurts most early on. In the first years, most of your payment is interest, not principal. Run the numbers in our mortgage calculator and the amortisation curve makes it obvious.

Buying Costs Vary Enormously by Country

The default 5% here reflects typical closing costs in the US and UK. Elsewhere it is far higher, and it is the single input most likely to flip your result:

  • Spain: transfer tax (ITP) on resale homes runs roughly 6-10% depending on the region, plus notary, registry and admin — so budget 8-13% all-in.
  • France: "frais de notaire" on an older property run about 7-8.5%, and roughly 2-3% on new build.
  • Germany: property transfer tax alone is 3.5% (Bavaria) to 6.5% (NRW, Brandenburg), and with notary and agent fees total costs pass 12% in the priciest states.

Check the current rate for your own region before trusting any default. Rates move: several Spanish regions and around 90% of French departments changed theirs for 2026.

The Inputs That Actually Move the Needle

Play with the fields and you will notice most barely matter. Three dominate:

Investment return. This is the hidden lever. If your deposit compounds at 7% instead of 3%, renting gets dramatically stronger — because the renter's portfolio is doing the work the house was supposed to do. See how brutal that gap is in the compound interest calculator.

Home appreciation. Small changes swing the result hard, and it is the number people are least honest about. Long-run real house price growth is far closer to inflation than to the double-digit anecdotes people remember from booms.

Rent growth. Rent compounds. A fixed-rate mortgage does not. Over 20+ years this quietly becomes the strongest argument for owning — your housing cost freezes while the renter's keeps climbing. Our inflation calculator shows what that does to purchasing power.

What the Numbers Cannot Tell You

A calculator optimises one variable: money. It has nothing to say about the security of not being asked to leave, the freedom to knock a wall through, or the flexibility to take a job in another city next year.

It also assumes you actually invest the difference. Most renters do not — they spend it. If you are not genuinely going to put that money to work every month, the renting column here is fiction, and a mortgage's forced saving becomes a real advantage that this model gives you no credit for.

Treat the output as one input to your decision, not the decision. And remember this is educational, not personalised financial advice — your tax position, region and job security all change the answer.

How to Calculate Rent vs Buy

Formula: Net cost of buying vs (rent paid − investment return on the deposit)

  1. Add all buying costs: deposit, fees, mortgage, maintenance, tax.
  2. Subtract the equity you keep after selling costs and appreciation.
  3. For renting, add rent paid and subtract returns from investing the deposit.
  4. The lower net cost wins; the break-even year tells you the crossover.

Frequently Asked Questions

It depends almost entirely on how long you stay. Buying carries large upfront costs (5% to 13% of the price depending on the country) that are only recovered over time, so short stays favour renting. The break-even year in this calculator is the honest answer: if you will move before it, renting usually wins; if you will stay well past it, buying usually wins.
It is the year at which the net cost of owning drops below the net cost of renting. It exists because buying and selling costs are paid up front and recovered slowly through equity and appreciation. For typical inputs it lands somewhere between year 5 and year 10, but high transaction costs or a strong investment return can push it far further out.
Because a deposit has an opportunity cost. Money locked into a property is money that is not compounding in an index fund. Ignoring that makes buying look better than it is. This calculator assumes a renter invests the deposit and any monthly difference, which is the only fair comparison — provided you actually do it.
They vary far more by country than most people expect. Around 2-5% in the US and UK, roughly 7-8.5% for an older property in France, about 8-13% in Spain once regional transfer tax is included, and above 12% in the most expensive German states. Always check the current rate for your specific region, as several changed for 2026.
No. Over long horizons buying is usually ahead, mainly because a fixed mortgage payment stops rising while rent compounds. But if home appreciation is weak, transaction costs are high, or your alternative investment return is strong, renting and investing the difference can beat buying even over decades.
Yes. Every calculator on WealthCalcApp is free, needs no sign-up, and runs entirely in your browser — none of the figures you type are sent to a server.