What this comparison works out
This calculator compares the cash you would spend renting over a chosen period against the cash you would spend owning the same home — mortgage payments, upkeep and the upfront costs of buying.
It compares cash out only. It does not value the equity you build, and it does not guess at house price movements. That is a deliberate limitation, explained below, and it is the reason the result is one input to the decision rather than the answer.
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Before you compare
- Use a mortgage payment for the amount you would actually borrow, at a realistic rate. The Mortgage Affordability Calculator will give you a starting figure.
- Be honest about upkeep. A common rule of thumb is 1% of the property value a year for maintenance, plus buildings insurance, service charges and ground rent where they apply.
- Include every upfront cost in the fees field: deposit-adjacent costs such as stamp duty, legal fees, survey, mortgage arrangement fee and removals.
- Choose a comparison period that matches how long you realistically expect to stay. Short periods favour renting because the upfront costs have less time to amortise.
Mortgage payments build equity, so part of what an owner pays returns to them; rent does not. Against that, house prices can fall, transaction costs are large, and money not tied up in a deposit could be invested elsewhere. Modelling all of that requires assumptions about future returns that would dominate the result.
How this calculator works
Two totals over the same period:
Rent cost = monthly rent × 12 × years
Buy cost = (monthly mortgage + monthly upkeep) × 12 × years + upfront costsBoth figures are cash leaving your account. Neither is adjusted for inflation, and rent is assumed to stay flat — in reality rent tends to rise over time while a repayment mortgage on a fixed rate does not, which favours buying over longer periods.
The single largest omission is equity. Over five years of a 25-year repayment mortgage, roughly 15% of the payments go to capital rather than interest, so a meaningful part of the buying figure is money you still hold.
Worked example: five years
Using the default figures — £1,200 a month rent against a £1,300 mortgage plus £200 of upkeep, with £10,000 of upfront costs, over five years:
- Renting: £1,200 × 12 × 5 = £72,000
- Buying: (£1,300 + £200) × 12 × 5 + £10,000 = £100,000
- Cash difference: buying costs £28,000 more
On cash alone renting wins clearly. But of the £78,000 in mortgage payments, perhaps £12,000 has gone to capital rather than interest and is still yours as equity, which narrows the real gap to around £16,000. Extend the comparison to ten years and the £10,000 of upfront costs is spread twice as thinly while rent has probably risen. The period you choose changes the answer more than any other input.
Common mistakes
- Reading the cash difference as the true cost difference. Equity is real money and is not counted here.
- Underestimating upkeep. Boilers, roofs and windows are the owner's problem, and they arrive without warning.
- Assuming rent stays flat. Over ten years it rarely does, while a repayment mortgage falls in real terms.
- Comparing over an unrealistically short period. Transaction costs make buying poor value if you move within a couple of years.
- Ignoring the opportunity cost of the deposit. Money in a deposit is money not invested elsewhere.
Frequently asked questions
Is buying always better in the long run?
No, though it often is over long periods. Buying wins when you stay put long enough to amortise the transaction costs, when rent rises faster than your mortgage, and when prices at least hold. It loses when you move within a few years, when maintenance is heavy, or when prices fall. There is no universal answer, which is why the period and the upkeep figure matter so much.
How much should I allow for maintenance?
A common guideline is 1% of the property value a year, averaged over time. That will overstate it in most years and badly understate it in the year the boiler and the roof both fail. Flats often cost less in direct maintenance but carry service charges and ground rent, which can exceed what a house would cost.
What about the deposit I could have invested?
That is a genuine argument for renting, and this calculator does not model it. A deposit invested rather than spent could grow, though it is also exposed to market falls. If you want to weigh it, use the Compound Interest Calculator on the deposit amount over the same period and treat that as a cost of buying.
Does this account for house price growth?
No, deliberately. Any assumption about future house prices would dominate the result and would be a guess. If prices rise, buying looks considerably better; if they fall, considerably worse. Treating price movement as unknown is more honest than modelling it.
What if I might move for work?
That argues strongly for renting, at least for now. The upfront costs of buying — stamp duty, legal fees, survey and moving — are typically recovered over several years, not months. Selling within two or three years often means the transaction costs alone exceed any gain.
Related tools
References
- MoneyHelper — impartial guidance on renting versus buying and the costs of each
- Office for National Statistics — official UK house price and private rent statistics
- GOV.UK — tenant and homeowner rights, and government housing schemes
Sources are checked at publication and can change — how I choose and check references.