This calculator compares the total financial cost of renting a property against buying a comparable one over a period you choose. It includes the one-off costs of buying (Stamp Duty Land Tax, solicitor fees, survey), ongoing costs (mortgage interest, maintenance), and the opportunity cost of the deposit if you were to rent and invest that money instead. All assumptions are labelled. You can adjust them to reflect your view of the market.
Property details
Assumptions (you can change these)
Buying costs
How to use this tool
- Enter the property value you are considering buying and the monthly rent for a comparable property.
- Set your deposit size, mortgage rate, and time horizon.
- Adjust the assumption figures (property appreciation, investment return, maintenance rate) if the defaults do not reflect your situation.
- Your results will show the net financial position under each scenario.
Understanding your results
The calculator returns a net wealth figure for each option after your chosen time horizon. Net wealth for buying is the equity in your property minus all money spent on transaction costs, mortgage interest, and maintenance. Net wealth for renting is the value of your invested deposit minus total rent paid. A higher net wealth figure means that option leaves you with more money at the end of the period, given the assumptions entered.
Changing the assumptions changes the outcome. A higher property appreciation rate favours buying. A higher investment return rate favours renting. The calculator does not recommend one option. It shows the financial implications of each, given what you enter.
Legal context
Stamp Duty Land Tax (SDLT) applies to residential property purchases in England and Northern Ireland. Standard rates from April 2025: 0% on the first £125,000, 2% on £125,001 to £250,000, 5% on £250,001 to £925,000, 10% on £925,001 to £1.5 million, and 12% above £1.5 million. First-time buyers pay 0% on the first £300,000 and 5% on £300,001 to £500,000; properties above £500,000 use standard rates. Buyers in Scotland pay Land and Buildings Transaction Tax (LBTT) and buyers in Wales pay Land Transaction Tax (LTT) under different rate structures. This calculator uses England and Northern Ireland SDLT rates. Source: HMRC SDLT guidance, 2026.
This calculator gives a financial estimate. It does not constitute financial or property advice.
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Frequently asked questions
What does this calculator include in its comparison?
The calculation models monthly mortgage repayments against rent, accounts for Stamp Duty Land Tax (SDLT), estimates the opportunity cost of the deposit as foregone investment returns, adds a maintenance allowance (typically 1 per cent of property value per year), and applies a long-run house price appreciation assumption. The output shows a 10-year net position for each option side by side.
Why compare over a 10-year horizon?
Transaction costs for buying (SDLT, legal fees, survey, mortgage arrangement) typically total 3 to 5 per cent of the purchase price. Short holding periods mean these costs are spread over fewer years, making renting more competitive. Over 10 years, appreciation and equity accumulation usually shift the calculation toward buying, though this depends heavily on the local market.
How does mortgage stress testing work for residential buyers?
As of August 2022, the Bank of England removed the 3 per cent stress test requirement for residential mortgages, relying instead on lender-level affordability assessments. Most high-street lenders still apply an internal affordability rate of around 6 to 7 per cent and cap borrowing at 4.5 times income. For buy-to-let mortgages, lenders apply an Interest Coverage Ratio of at least 125 to 145 per cent at a notional stressed rate.
When is renting financially better than buying?
Renting is typically more cost-effective when the purchase price-to-annual-rent ratio exceeds 25 (meaning the gross rental yield is below 4 per cent), when you plan to move within 3 to 5 years, or when mortgage rates are significantly above rental yields. In cities where a comparable property costs 30 to 40 times annual rent, buying rarely makes short-term financial sense.
How is rental yield useful when deciding whether to buy?
Gross rental yield (annual rent divided by purchase price) is a proxy for whether a market is priced for renters or buyers. A yield below 4 per cent in a given area suggests property prices are high relative to rent, making buying less attractive on a pure cost basis. UK national gross yields averaged around 4 to 5 per cent in 2024 according to Rightmove data.
What is the first-time buyer Stamp Duty relief from April 2025?
From 1 April 2025, first-time buyers in England pay no SDLT on the first £300,000 of a purchase (reduced from £425,000). The 5 per cent rate applies to the portion between £300,001 and £500,000, with no relief above £500,000. This relief does not apply to Scotland (LBTT) or Wales (LTT), which have separate thresholds.
How much deposit do I need to buy a home in the UK?
Most lenders require a minimum deposit of 5 per cent (95 per cent LTV mortgages), though rates improve significantly at 10, 15, and 25 per cent. A larger deposit reduces the Loan-to-Value ratio and typically secures a lower interest rate, reducing monthly repayments. First-time buyers with a 5 per cent deposit can access the government-backed Mortgage Guarantee Scheme through December 2025.
What house price appreciation rate should I use in the calculation?
UK house prices rose at an average of approximately 3.8 per cent per year over the 20 years to 2024 (HM Land Registry UK House Price Index). Using 3 to 4 per cent is a reasonable central assumption for long-run projections, but past performance does not guarantee future returns. Run the calculator at 0 per cent appreciation to see the worst-case scenario.
What is shared ownership and how does it affect the comparison?
Shared ownership allows you to buy a share of a property (typically 10 to 75 per cent) and pay a subsidised rent on the remaining share to a housing association. It reduces the deposit and mortgage required but adds a rent liability that this calculator should model separately. You can staircase (buy additional shares) over time up to 100 per cent in most cases.
Why does leasehold versus freehold matter in a rent vs buy decision?
Leasehold properties carry additional annual costs including service charges (often £1,000 to £5,000 per year for flats) and ground rent (phased out for new leases under the Leasehold Reform (Ground Rent) Act 2022, but still applicable to existing leases). A short lease below 80 years incurs expensive extension costs and reduces mortgage eligibility. Factor these into total ownership costs when comparing against rent.