Rent vs Buy Calculator
Compare the total cost of renting versus buying a home in the UK over 5 to 25 years. Includes stamp duty, maintenance, equity, and mortgage costs.
Comparison Period
Renting
Buying
Stamp Duty
£7,500
Summary
Total Renting Cost
£529,513
Monthly Mortgage
£1,842
Equity Built
£300,000
Net Cost After Equity
£473,679
Buying is cheaper
£55,835
Typical Monthly Costs
Renting
Buying
Note: Stamp duty rates are based on 2026 UK thresholds. Your actual monthly mortgage payment may vary based on your lender's fees. Equity built assumes you pay off the mortgage over the full term. Property values are not included in this calculation.
The Real Cost of Renting vs Buying Over 25 Years
Renting is not simply throwing money away, and buying is not simply free property growth. Both have hidden costs that need adding to the obvious monthly figure. For renting: rent rises (typically 3% a year compounded), contents and renters insurance, agency fees on each new tenancy. For buying: stamp duty up front, mortgage interest (which dominates payments in the first 10-15 years), maintenance (figure 1% of property value per year - so £4,000 a year on a £400,000 home), buildings insurance, ground rent if leasehold, and selling costs at the end.
Run a £400,000 home with a £100,000 deposit at 5.5% over 25 years versus £1,200/month rent rising 3% a year. Buying costs roughly £635,000 across 25 years (mortgage payments, maintenance, insurance, stamp duty, deposit). Renting costs roughly £525,000 across 25 years. Buying looks £110,000 worse - until you factor in that the buyer ends with a paid-off home worth roughly £700,000 if it tracks 2.5% house price growth. The buyer's equity makes them about £590,000 better off in net wealth terms.
When Renting Genuinely Beats Buying
Short time horizons are the obvious case. Buying involves £15,000 to £30,000 in transaction costs (stamp duty, legal fees, surveys, mortgage arrangement, removals); selling adds estate agent fees of 1% to 1.5%. If you move within 5 years, those costs swamp any equity built and the buyer ends up worse off than the renter. The 5-year break-even is the rule of thumb most UK financial advisers quote.
High-mobility careers, areas with rent-to-price ratios under 4% (where rent is much cheaper than buying), and those who would invest the deposit in a Stocks and Shares ISA returning 7% over 25 years can all make renting the better choice. Use the [Stamp Duty Calculator](/stamp-duty-calculator) to see your exact upfront cost, and the [Mortgage Calculator](/mortgage-calculator) to compare monthly burden against your local rental market before committing.
Frequently Asked Questions
What rent increase rate should I use?
3% is the long-run UK average since 2010, but the last 3 years have seen renewals routinely at 5% to 8% in major cities. Use 3% for a long-term planning view, or set it higher to stress test. Tenants on rolling assured shorthold tenancies typically see steeper increases than those on long fixed terms, because landlords use renewals as the moment to bring rents to market.
How much should I budget for maintenance on a property?
1% of the property value per year is the standard rule of thumb across UK property circles. So £400 per £40,000 of value - or £4,000 a year on a £400,000 house. New builds skew lower in early years; Victorian terraces with old plumbing, original windows and a roof past its prime can run at 2% to 3%. Leasehold flats have predictable service charges instead, but those have risen 8% to 15% a year recently due to building safety remediation costs.
What if house prices fall?
House prices have fallen meaningfully a few times in living memory (1989-95 dropped about 20% nominal in real money terms; 2007-09 dropped about 16%; 2022-23 saw a small dip then recovery). The break-even comparison is sensitive to growth rate - drop the assumption from 2.5% to 0% and buying often loses across 25 years. Use the calculator to flex the growth rate and see how robust your conclusion is to different scenarios.
Should I include the deposit as a cost or an investment?
Both views are valid. As a renter you would either spend that deposit, save it earning interest, or invest it in a Stocks and Shares ISA. The opportunity cost is real - £100,000 in a 7% return investment becomes £540,000 over 25 years, which is comparable to the equity in the bought home. The calculator treats the deposit as a sunk buying cost; you can mentally add the foregone investment growth on the renting side for a fairer comparison.
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