Rent vs Buy Calculator
Compare the full cost of renting and owning the same home: mortgage interest, transaction costs, maintenance, and the return your down payment could earn if you invested it instead.
1Home and horizon
Prefills typical transaction costs, mortgage terms and property tax for the selected country. Every value below stays editable.
$
$
What you would pay today to rent the same home.
yrs
The comparison assumes you sell when you leave.
2Mortgage and transaction costs
%
%
yrs
%
One-time costs on purchase: transfer tax, notary, registration, agent fees.
%
Deducted from the sale proceeds at the end of the horizon (agent commission, fees).
Loan amount $600,000LTV 80%
3Running costs and market assumptions
%
Percent of the home value: repairs, reserves, insurance.
%
Percent of the home value. Varies widely by country and municipality.
%
%
%
What your down payment and buying costs could earn per year if you rented and invested them instead.
Break-even point
12 years
If you stay at least 12 years, buying works out cheaper than renting, after counting the equity you build, the costs of buying and selling, and the returns your upfront cash could have earned elsewhere.
Net cost of owning
Cost of renting
$1.2M
$897k
$598k
$299k
$0
Break-even · Year 12
Buy4y8y12y16y20y
Both lines show net cost, not cash out of pocket. Buying needs $172,500 upfront (down payment plus buying costs), but the down payment itself is not a cost: it comes back as equity when you sell. Only about $67,500 of transaction costs is sunk on day one. The exact formula is described in the methodology section at the bottom of this page.
Owning, net
$967k
Renting
$1.11M
Difference
$141k
Mortgage / mo
$3.8k
After 20 years, owning leaves you $140,507 better off than renting, including the assumed sale of the home.
If home prices grow...Break-even year at each price growth rate
Treat the result as a range, not a point: with your current assumptions the break-even is Year 12; if your investments returned 7% instead, it moves to Year 17. Small changes in growth and return assumptions move the answer by years.
How to use this calculator
Find the year buying beats renting.
1
Pick your country
The preset fills in typical transaction costs, mortgage rate and term, property tax and maintenance for 15 countries, aligned with published bank practice. Everything stays editable.
2
Describe the home
Enter the purchase price and what the same home would cost to rent per month, then set how long you plan to stay. The horizon matters more than almost any other input.
3
Check the assumptions
Review the down payment, interest rate, growth rates and the return your invested down payment could earn. Small changes here move the answer, so test a few scenarios.
4
Read the break-even year
The chart shows the cumulative net cost of both paths. Where the owning line drops below the renting line is your break-even year. Staying longer than that favors buying.
Key concepts
The moving parts behind the break-even year.
Break-even year
The first year in which the total net cost of owning drops below the total cost of renting. Before it the renter is ahead; after it the owner is.
Opportunity cost
Money locked into a down payment cannot be invested elsewhere. The calculator charges the owner the return that cash could have earned, compounding every year.
Transaction costs
One-time buying costs (transfer tax, notary, agent, registration) plus selling costs at the end. They are sunk the day you buy and are the main reason short stays favor renting.
Net cost of owning
Everything the owner pays (down payment, mortgage, maintenance, tax, foregone returns) minus the equity recovered on sale: home value net of selling costs, less the remaining loan.
Equity
The part of the home you actually own: current value minus the outstanding mortgage. Principal payments and price growth build it; selling costs shrink what you get back.
Price-to-rent ratio
Home price divided by annual rent for the same home. High ratios (Switzerland, expensive city centers) favor renting; low ratios favor buying.
Amortization
Each mortgage payment splits into interest (a true cost) and principal (forced saving). Early payments are mostly interest; the split improves over time.
Holding horizon
How long you keep the home. Transaction costs spread over more years the longer you stay, which is why rent vs buy is really a question about time.
Tips for the decision
How to make the comparison honest.
Stay past the break-even year
Transaction costs amortize over your stay. If there is a real chance you move within 5 years, renting usually wins, in almost every country.
Compare the same home
The math only works if the rent is for a home you would actually buy: same size, same neighborhood. Comparing a small rental with a large purchase biases the result toward buying.
Do not skip maintenance
Owners pay roughly 0.5 to 1.5% of the home value every year in upkeep, insurance and reserves. Leaving it out is the most common way rent-vs-buy math flatters buying.
Test pessimistic price growth
Run the sensitivity lever at 1 point lower growth. If the decision flips, your plan depends on the housing market cooperating, and it may not.
Actually invest the difference
The renting path only wins if the down payment really goes into investments and stays there. Cash sitting in a checking account earns nothing and flips the result.
Mind the country specifics
Buying costs range from about 2.5% in Switzerland to 10% or more in Germany and Spain. Tax treatment (deductions, imputed rent, capital gains) differs too and can shift the result.
FAQ
Is it cheaper to rent or to buy?+
It depends on the price-to-rent ratio, transaction costs, mortgage rates and how long you stay. Short stays favor renting because buying and selling costs are sunk immediately, while long stays favor buying because equity accumulates. This calculator computes the break-even year for your exact numbers.
What is the 5% rule in rent vs buy?+
A popular shortcut: multiply the home price by 5% and divide by 12. If renting the same home costs less than that, renting is likely cheaper. The 5% approximates unrecoverable ownership costs (interest, maintenance, cost of equity capital). This calculator replaces the shortcut with a full year-by-year simulation.
How does the calculator account for the down payment?+
The down payment and buying costs are treated as cash a renter would have invested instead. Their foregone return compounds at your expected investment return and is added to the cost of owning. That is the opportunity cost that simple comparisons miss.
Why does buying look worse in Germany or Spain than in the United States?+
Transaction costs. German buyers pay 9 to 12% in Kaufnebenkosten and Spanish buyers around 10%, against roughly 3% closing costs in the US. Those costs are sunk on day one and take years of equity building to earn back, so the break-even year comes later.
Does the calculator include tax effects?+
Only property tax, as a yearly percentage of the home value. Country-specific income tax effects (mortgage interest deductions, imputed rent taxation in Switzerland, capital gains exemptions) are not modeled; they can move the result in either direction. Check how they apply to you before deciding.
What investment return should I assume?+
A broad stock portfolio has returned about 6 to 7% per year nominal over long periods. Use less if your money would sit in savings accounts or bonds. The higher the return you can realistically earn, the stronger the case for renting and investing.
What happens after the mortgage is paid off?+
The owner's mortgage payment drops to zero while rent keeps growing, so owning gets a large boost from that year on. With long horizons this is a major driver of the buy side, which is why the mortgage term matters.
Is the home counted as an asset at the end?+
Yes. The simulation assumes you sell at the end of the horizon: the home value, grown at your price growth rate, minus selling costs and the remaining loan is credited back to the owner. Without that credit, buying would look artificially expensive.
Why does rent growth matter so much?+
Rent compounds. At 2% growth, a rent of 2,000 becomes about 2,970 in 20 years; at 4% it becomes about 4,380. The mortgage payment is fixed in nominal terms, so high rent inflation is one of the strongest arguments for buying.
Are the country presets exact?+
They are realistic starting points: typical mortgage rates, terms, down payments and transaction costs per country, aligned with the bank affordability rules used in our country insights. Your city, bank and personal deal will differ, so override any number you know better.
Both paths are simulated year by year for up to 50 years. Owning: down payment and buying costs are paid upfront, the mortgage amortizes monthly at the given rate and term, maintenance and property tax accrue as percentages of the growing home value, and the upfront cash carries an opportunity cost compounded at your expected investment return. Each year the owner is credited the equity recoverable on sale: home value net of selling costs minus the remaining loan. Renting: rent is paid monthly and grows yearly at the rent growth rate. The break-even year is the first year the cumulative net cost of owning falls below the cumulative cost of renting. Differences in monthly cash flow between the two paths are not reinvested, and income tax effects are not modeled. Country presets derive from the bank affordability rules and market data behind our affordability insights. Indicative only, not financial advice.
Country presets · national bank affordability practice and published transaction cost ranges · illustrative, not financial advice