Tool 18 · Rent vs buy
Rent it, or own it?
The oldest argument in money, settled with a fair test: the buyer builds equity in a home; the renter invests the deposit and anything they save each month. Both live on the same budget — then we see who's wealthier, year by year.
Move the sliders to compare.
Pro features. Take control of every assumption — home appreciation, rent growth, investment returns, maintenance and transaction costs — plus insights, the year-by-year race and exports.
Challenge the assumptions
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Maintenance, property tax and insurance, as a share of the home's value.
Taxes, fees, legal costs paid up front when you buy.
The race, year by year
Compare how long you stay
| You stay | Owner ahead by | Verdict |
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A fair fight between renting and buying
"Rent is throwing money away" and "a house is the best investment you'll ever make" are both slogans, not analysis. The honest comparison needs a level playing field, and that's what this calculator builds. Both people get the same monthly budget — enough to cover whichever option is more expensive that month. The buyer pays the mortgage and maintenance; the renter pays rent. Whoever has money left over invests the difference. The renter also invests the deposit and buying costs they never spent. Then we simply track two net worths: the owner's home equity (minus what selling would cost) plus their investments, against the renter's portfolio.
Framed this way, the result stops being ideological and starts depending on numbers you can actually estimate: the price-to-rent ratio in your area, mortgage rates, how fast home prices and rents grow, what investments return, and — crucially — how long you stay. Buying carries heavy entry and exit costs (often 5–8% of the price combined), which the owner must earn back through equity and appreciation. That's why the chart usually shows renting ahead in the early years and ownership catching up later: the famous crossover point. Stay past it, and buying wins; move before it, and renting quietly wins.
The free tier uses sensible long-run defaults — 3% home appreciation, 3% rent growth, a 6% investment return, 2% a year for upkeep, property tax and insurance, and typical transaction costs. Pro hands you all six dials, which matters because the verdict can flip within realistic ranges: high price-to-rent cities often favour renting for a decade or more, while cheap-to-buy areas favour owning almost immediately. Pair this with the affordability calculator to make sure the price you're testing is one you can actually carry.
A worked example
€300,000 home · 20% deposit · 4.5% mortgage · €1,300 rent · staying 20 years
The buyer puts down €60,000 plus €15,000 of buying costs and pays about €1,216/month on the mortgage, plus roughly €500/month in upkeep, tax and insurance. The renter starts with that €75,000 invested and pays €1,300 rising 3% a year. Early on the renter's portfolio leads — the buyer's cash went into fees and interest-heavy payments. But as rent climbs past the frozen mortgage payment and equity builds, the owner crosses ahead around year 7 and ends year 20 roughly €83,000 wealthier. Shorten the stay to 5 years and the verdict flips to renting.
Things to keep in mind
- Time in the home is the biggest single factor. Under about five years, transaction costs make buying hard to justify almost anywhere. The compare table shows the verdict at different horizons.
- The renter only wins if they actually invest. The model assumes disciplined investing of every euro saved. If the difference would get spent, ownership's "forced saving" is worth real money.
- A fixed mortgage is inflation protection. Rent rises every year; a fixed payment doesn't. Much of ownership's long-run advantage is simply that its biggest cost is frozen.
- Leverage cuts both ways. With 20% down, a 3% rise in the home's value is a 15% return on your deposit — and a 3% fall works the same way in reverse. Appreciation assumptions matter enormously.
- Owning has unpriced benefits and costs. Security and freedom to renovate on one side; illiquidity, concentration risk and stress on the other. The model prices the money — you price the rest.
Frequently asked questions
What is the crossover point?
The year the owner's net worth first overtakes the renter's. Before it, the heavy up-front costs of buying leave the renter-investor ahead; after it, growing equity and frozen housing costs put the owner in front. If you'll move before your crossover, renting is usually the financially stronger choice.
Why does the renter start with money invested?
Fairness. The buyer spent a deposit and buying costs; the renter didn't. Comparing them honestly means the renter invests that same cash from day one — this is the step most "rent is wasted money" arguments skip.
What's a price-to-rent ratio and why does it matter?
The home's price divided by a year of rent for a comparable home — here, €300,000 ÷ €15,600 ≈ 19. Below roughly 15, buying tends to win quickly; above 20–25, renting-and-investing often stays ahead for a long time. It's the fastest sanity check for your local market.
Does the model account for selling costs?
Yes — the owner's equity is always shown net of selling costs (3% by default, adjustable in Pro), so the comparison reflects what they'd actually walk away with, not the sticker value of the home.
What if I'd buy with cash, no mortgage?
Set the deposit to the maximum. The question then becomes purely whether the home's appreciation plus avoided rent beats what the same cash would earn invested — the same fair test, without leverage.