Should I Rent or Buy Calculator

The tool compares two parallel paths over a period you choose (typically 5 to 15 years). Path one: you rent at your current monthly rent, no equity built, no maintenance bills. Path two: you buy with the deposit you have, take on a mortgage at the rate and term you specify, pay maintenance and insurance on the property, and benefit from any property value growth. After the chosen number of years, the tool tots up total cost on each side, deducts the equity built and the property gain, and shows which path leaves you better off financially.

The standard estimates baked in: 1% of property value per year for maintenance, 0.3% for insurance, 0.2% for council tax escalation. These are rough industry averages; actual costs vary by property age, location, and condition. A 1970s detached house with a slate roof costs more to maintain than a new-build flat with a service charge that handles the structural side. Adjust the inputs upwards if you're buying older or more rural property.

Buying ties up the deposit in property; renting lets you invest it. If your deposit is £60,000 and you'd otherwise invest it at 6% in a Stocks and Shares ISA, that's roughly £24,000 of compound growth over 5 years that buying foregoes. Property has historically grown around 2.5-4% a year nationally, so the comparison usually favours investing the deposit unless you stay 8-10+ years and let property gains accumulate while you also build equity through mortgage payments.

This is why renting can be the rational choice even when 'rent is dead money' is the conventional view. The deposit invested productively, plus the avoidance of stamp duty, conveyancing, and immediate maintenance bills, often beats home ownership for stays under 5 years. The break-even tends to be 7-10 years for most UK markets, though London's price-to-rent ratio is so distorted that buying often only beats renting after 12-15 years.

Stamp duty: 0% on first-time buyers under £425,000, then 5% on the slice between £425,000 and £625,000, rising to 10% and 12% on higher slices. Conveyancing and survey fees: £1,500-£3,000 typically. Mortgage arrangement fee: £0-£2,000 depending on the deal. Moving costs: £500-£2,000. These add up to roughly 2-4% of the purchase price as a one-off transaction cost that renting avoids.

On the other side of the ledger, rent rises with inflation while mortgage payments on a fixed-rate deal stay constant for the deal's term, then track interest rates. If you're 5 years into a fixed mortgage and rents have risen 25%, your payment hasn't changed and your monthly cash advantage versus renting has grown. The [stamp duty calculator](/stamp-duty-calculator) gives precise figures for any specific purchase price; the [mortgage calculator](/mortgage-calculator) shows what your monthly payment would actually be.