Compare the long-term cost of renting vs buying a home, including equity, appreciation, council tax, and maintenance.
Rates as of Q2 2025 (example)
A rent vs buy calculator compares the financial outcome of renting a home versus buying one over a chosen time period, accounting for the deposit, mortgage payments, house price growth, equity built up, council tax, maintenance costs, and rising rent over time. It helps answer the question: over the years you're comparing, would you likely be financially better off renting or buying?
For buying, the calculator tracks your deposit, cumulative mortgage payments (interest and principal), and cumulative council tax and maintenance costs over the comparison period, then subtracts the equity you'd have built up — both from mortgage principal paid down and from house price growth — to arrive at a "net cost of buying." For renting, it simply totals your rent payments, increasing each year by your assumed rent growth rate. The two totals are then compared.
Formula: Net Cost of Buying = Deposit + Cumulative Mortgage Payments + Cumulative Council Tax & Maintenance − Equity (Property Value − Remaining Mortgage Balance). Total Cost of Renting = Sum of Annual Rent, each year increased by the rent growth rate.
Example: For a £300,000 property with a 15% deposit (£45,000), a 5.25% mortgage rate (example rate — enter your actual rate) over 25 years, starting rent of £1,300/month with 3% annual increases, 3% annual house price growth, and 1.6% combined council tax and maintenance, comparing over 10 years might show buying coming out tens of thousands of pounds ahead of renting — primarily because of equity built up through both mortgage repayment and house price growth. (Note: this example is for illustration purposes only — actual results depend heavily on the assumptions used, particularly house price growth, which is inherently uncertain.)
The rent-vs-buy decision in the UK depends heavily on assumptions about house price growth and rent increases — both of which are uncertain and can vary significantly by region and over time. Buying involves upfront costs not modelled by this calculator, such as Stamp Duty Land Tax, solicitor fees, surveys, and moving costs, which can add a meaningful amount to the cost of buying, especially over shorter time horizons. Buying also involves less flexibility — selling a property and moving involves significant time and transaction costs compared to ending a tenancy, which is relevant if you expect to relocate within a few years. On the other hand, a mortgage payment (at least the principal portion) builds equity, while rent payments don't build any ownership stake. Over short time horizons, renting often comes out ahead due to buying's upfront costs and lower equity built up; over longer horizons, buying often becomes more favourable, particularly if house prices grow over time — though this isn't guaranteed.
No. This calculator focuses on ongoing costs (mortgage payments, council tax, maintenance) and equity built up versus rent paid. Upfront costs like Stamp Duty Land Tax, solicitor fees, and surveys aren't included but would add to the cost of buying, particularly over shorter comparison periods.
House price growth directly affects the equity you'd build through homeownership — higher growth increases your equity (reducing the net cost of buying), while lower or negative growth reduces or eliminates this benefit. Since future house price growth is uncertain, try testing different assumptions, including more conservative ones.
Often, but not guaranteed. Over longer periods, more of your mortgage payment goes toward principal (building equity), and house price growth (if it occurs) compounds. However, this depends on the assumptions used — a scenario with low house price growth and high mortgage rates could favour renting even over longer periods.
No. This calculator compares the net cost of buying to the total cost of renting directly. It doesn't model what would happen if you invested the difference (e.g., the gap between a mortgage payment and a lower rent) in other assets — that would be an additional consideration for a renter's overall financial position.
Council tax is a recurring cost of homeownership (renters may or may not pay council tax depending on their tenancy agreement, but it's often included in rent or paid separately). This calculator includes council tax as a cost of buying, based on a percentage of the property's value, which increases as the property value grows.
For shorter time horizons, renting often comes out ahead financially, because buying involves upfront costs (not all included in this calculator) and because relatively little equity is built up early in a mortgage term, while house price growth has less time to compound. Use a comparison period that reflects your realistic time horizon.
Disclaimer: The information, rates, and figures provided on this page are for educational and illustrative purposes only and do not constitute financial or property advice. House price growth, rent increases, and other assumptions are uncertain and may not reflect actual future outcomes. This calculator does not include upfront costs such as Stamp Duty Land Tax, legal fees, or survey costs. Always consult a qualified financial adviser before making property decisions.