Rent vs Buy Calculator

💰 The Rent vs Buy Reality

This isn't just about monthly payments – it's about your entire financial picture and lifestyle. Renting isn't "throwing money away" and buying isn't always the smart move. The right choice depends on your timeline, finances, and personal situation. Let's dig into the real numbers and hidden costs most people forget about.

The general rule of thumb? If you're staying put for less than 5 years, renting usually wins. More than 7 years? Buying often comes out ahead. That 5-7 year grey area? That's where this calculator earns its keep by crunching your specific numbers.

🏠 The True Cost of Buying

• Upfront costs: 5-20% deposit plus 2-5% in fees, surveys, legal costs
• Monthly payments: Mortgage, council tax, insurance, maintenance (1-3% of home value annually)
• Hidden costs: Boiler breakdowns, roof repairs, garden maintenance
• Opportunity cost: Your deposit could be earning 7%+ in the stock market
• Transaction costs: Estate agent fees (1-3%) plus legal costs when selling

⏱️ When Buying Makes Sense

• Long-term stability: Planning to stay 7+ years
• Fixed housing costs: Protection against rent increases
• Building equity: Each payment increases your ownership
• Potential appreciation: Property values may increase over time
• Control and customisation: It's your castle to modify

🏢 The Renting Advantage

Flexibility is priceless: Got a job offer in another city? Found your dream neighbourhood? Want to downsize? Renters can move with just a few months' notice. Homeowners face estate agent fees, legal costs, and the stress of selling – easily £10,000+ in transaction costs.

• Low entry costs: Usually just deposit (1-6 weeks' rent) and first month
• No maintenance headaches: Broken boiler? Leaky roof? That's the landlord's problem
• Investment opportunity: Invest your "would-be" deposit in stocks/bonds
• Predictable budgeting: One monthly payment covers everything
• Location flexibility: Live in areas you couldn't afford to buy

📈 Key Factors to Consider

• Interest rates: Higher rates = higher mortgage costs (favour renting)
• House price trends: Rapidly rising prices can favour buying early
• Rent vs buy ratio: If buying costs 20x+ annual rent, renting often wins
• Your age and career: Early career = more moves = favour renting
• Family plans: Space needs changing? Renting gives flexibility

🎯 Smart Decision Making

The 1% rule: If monthly rent is more than 1% of the purchase price, buying might be better. £300,000 house should rent for £3,000+ monthly to favour renting.

• Factor in ALL costs: Maintenance, insurance, taxes, opportunity cost
• Consider your deposit return: Could it earn 7%+ invested elsewhere?
• Think lifestyle: Do you want the responsibility of ownership?
• Plan for the unexpected: Job changes, family changes, market changes