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GovMath.

Property · With opportunity cost

Rent vs Buy Calculator

Buying isn’t automatically better. We compare the net cost of owning (interest + maintenance − equity built) against renting (rent − investment growth on your would-be deposit).

£
£
£
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yrs
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Buying wins over period

£118,457

Buy: mortgage payment£1751/mo
Buy: interest paid£90954
Buy: equity built£157160
Rent: total paid£126000
Rent: investment gain on deposit£14249

How we calculated your result

Buying side: amortise the mortgage, add maintenance at ~1%/year, subtract the equity built (paid principal + appreciation). Renting side: total rent paid, minus the investment growth on your would-be deposit at your chosen real return. Excludes SDLT & transaction costs.

Official UK rules in simple English

  • Owning costs include: SDLT, legal fees, surveys, maintenance (~1%/yr), insurance.
  • UK long-run house growth ~2.5% real (Nationwide, since 1973).
  • UK long-run equity return ~5% real (Barclays Equity Gilt Study).
  • Time horizon matters — break-even is typically 5–7 years.

Common pitfalls to watch out for

  • ⚠ Excluded SDLT could change the answer

    On a £350k second-home purchase, SDLT alone is £20k+. Add to ownership cost.

  • ⚠ Maintenance is bigger than you think

    Roof, boiler, kitchen, bathroom — 1%/yr is a long-run average but real spend is lumpy.

  • ⚠ Optionality has value

    Renting lets you move for jobs cheaply. Don’t buy if your time horizon is <3 years.

Frequently asked questions

Are you including imputed rent for owners?
No — both scenarios assume the same housing services consumed. Just financial flows differ.
What about leverage?
Buying gives ~10× leverage on the deposit — magnifies both gains and losses. The growth-rate input captures this.

Educational. Real outcomes depend on local market, life circumstances, and luck.

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