How to Calculate Rent vs Buy
What is Rent vs Buy?
A rent vs buy calculator compares the total cost of renting a home against buying one over a given time horizon. It accounts for mortgage payments, opportunity cost of the down payment, maintenance, taxes, and rental increases.
Step-by-Step Guide
- 1Cost to buy: mortgage payments + maintenance (1–2% of value/year) + property taxes + insurance − equity built + opportunity cost of down payment
- 2Cost to rent: rent + renters insurance + investing the down payment at market returns
- 3The "break-even point" is when the cumulative cost of buying drops below renting
Worked Examples
Input
£300k house · £60k deposit · 5% mortgage · vs £1,200/month rent
Result
Break-even at approx year 7
Highly dependent on house price growth and investment returns
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