Compare the financial costs of renting versus buying a property over time in the UK.
By Konstantin Iakovlev · Founder, Calks.uk
Last updated: · Verified against UK lender and FCA 2026 guidance
Rates verified: 28 September 2026
5.73% = average 2-year fix, Moneyfacts, 15 Sep 2026
1.8% = 1.5% agent fee plus VAT
Wealth after 10 years
Buying ahead
by £53,676.72 · buying pulls ahead in year 2
Buying
| Monthly mortgage | £1,695.33 |
| Deposit + stamp duty (£0.00) + fees | £32,000.00 |
| Mortgage payments (interest £137,857.83) | £203,439.07 |
| Maintenance | £34,391.64 |
| Total paid out | £269,830.71 |
| Home value in year 10 | £403,174.91 |
| Mortgage still owed | -£204,418.76 |
| Selling costs | -£7,257.15 |
| Wealth at the end | £191,499.00 |
Renting and investing
| Rent paid | £165,079.86 |
| Invested on day one (buyer's upfront cash) | £32,000.00 |
| Invested when buying was dearer | £72,750.85 |
| Total paid out | £269,830.71 |
| Investment growth at 4% | £33,071.44 |
| Wealth at the end | £137,822.28 |
Net wealth year by year (if you sold or stopped that year)
| Year | Buying | Renting | Buying minus renting |
|---|---|---|---|
| 1 | £38,441.00 | £42,387.00 | -£3,946.00 |
| 2 | £52,841.00 | £52,841.00 | £1.00 |
| 3 | £67,826.00 | £63,354.00 | £4,472.00 |
| 4 | £83,423.00 | £73,919.00 | £9,504.00 |
| 5 | £99,658.00 | £84,525.00 | £15,133.00 |
| 6 | £116,562.00 | £95,164.00 | £21,398.00 |
| 7 | £134,165.00 | £105,825.00 | £28,340.00 |
| 8 | £152,499.00 | £116,497.00 | £36,003.00 |
| 9 | £171,599.00 | £127,167.00 | £44,432.00 |
| 10 | £191,499.00 | £137,822.00 | £53,677.00 |
Both households spend the same each month: whichever option is cheaper that month invests the difference at your investment return, and the renter invests the deposit, stamp duty and fees the buyer pays on day one. Stamp duty uses England and Northern Ireland rates; Scotland (LBTT) and Wales (LTT) differ. Buildings insurance and service charges are not included separately, so add them to the maintenance percentage. Investment returns are shown before any tax, as in an ISA.
Disclaimer
This calculator is for guidance only. It is not financial or tax advice: check anything you rely on against the official source or a qualified adviser. Rates and figures come from lenders' published rates and FCA guidance and are reviewed for 2026. Everything is calculated in your browser; nothing you enter is sent to our servers.
How It Works
The rent-versus-buy decision turns on more variables than most comparisons admit: property prices, rental costs, mortgage rates, house price growth, the return a deposit could earn if it were invested elsewhere, and above all how long you plan to stay. This calculator models both options over the period you choose and reports the net wealth each leaves you with, year by year, so the year in which buying pulls ahead is visible rather than assumed.
On the buying side the model counts the deposit, stamp duty (with first-time buyer relief if you tick the box), legal and survey fees, repayment mortgage payments, maintenance as a percentage of the home's value each year, and the selling costs you meet when you sell. On the renting side it counts rent with an annual increase and invests the cash the buyer spends upfront, plus the monthly difference whenever buying costs more, at the return you enter. If rent is the dearer option in a month, the buyer invests the difference instead. Both households spend the same each month, so the comparison is simply which one ends up with more.
In the early years, renting and investing often wins, because buying front-loads its costs: stamp duty, legal fees and, at the end, agent fees all have to be earned back before ownership starts to pay. Over longer periods buying usually takes the lead, through house price growth and the capital repaid each month on a repayment mortgage. The answer is sensitive to the assumptions, so try a lower house price growth rate or a higher investment return to see how quickly the crossover year moves.
Ownership costs beyond the mortgage are where budgets tend to break. Buildings insurance runs £200-400 a year, and maintenance sustained at 1% of value is £2k a year on a £200k home. Flats add service charges of £1k-£5k, leasehold adds ground rent of £100-£500, and a boiler service is about £100 before anything actually goes wrong. When something does, a boiler replacement is roughly £3k, a roof £8k and a kitchen £10k. Budgeting 2-3% of the property value a year for total cost of ownership is far more realistic than the figure most first-time buyers have in mind.
Where you buy changes the answer completely. What matters is rent relative to price: where rents are high compared with prices, buying breaks even sooner, and where prices are high relative to rents, as in much of London, renting and investing can stay ahead for far longer once transaction costs are counted. Generalised rent-versus-buy advice misleads precisely because UK property is so local, which is why the numbers for your own area are the ones to enter. The ONS publishes average house prices and private rents for each local authority.
The opportunity cost of the deposit deserves proper weight, and most comparisons skip past it. Rent instead of buying, put the would-be deposit into a Stocks and Shares ISA averaging 7%, and £50k becomes £272k over 25 years. Put the same £50k into a £250k home growing at 3% a year and the property reaches £523k, though on an interest-only basis £200k of that is still owed to the lender at the end. Neither figure settles the argument alone, which is rather the point: the comparison only works when both sides carry their full costs and their full returns.
Example: £300,000 home vs £1,200/month rent over 10 years
- Assumptions: £30,000 deposit, 5.73% over 25 years (£1,695.33 a month), first-time buyer so no stamp duty, £2,000 fees, 1% maintenance, 3% house price and rent growth, 4% investment return
- Buying: £32,000 upfront + £203,439 mortgage payments + £34,392 maintenance = £269,831 paid out
- Home worth £403,175 after 10 years, less £204,419 still owed and £7,257 selling costs (1.8%) = £191,499 equity after sale
- Renting: £165,080 rent, while the £32,000 upfront cash and £72,751 of monthly differences invested at 4% grow to £137,822
- Net position: buying ahead by £53,677 after 10 years, and ahead from year 2
Frequently Asked Questions
- Is renting or buying cheaper over the years I plan to stay put?
- Property prices, rents, mortgage rates, house price growth, the return a deposit could earn if invested elsewhere, and the length of time you stay all shape the answer. Both options are modelled across the horizon you choose, so you can see the year in which one overtakes the other rather than relying on a rule of thumb that may not fit your area.
- How many years do I need to stay for buying to pay off?
- There is no fixed number. Stamp duty, legal fees and selling costs have to be earned back before ownership starts paying, so very short stays rarely favour buying, but the crossover depends on rent relative to price, the mortgage rate and your growth assumptions. For a £300,000 first-time purchase with a £30,000 deposit at 5.73%, against £1,200 a month rent, buying pulls ahead in year 2 with 3% house price growth and in year 6 with 2%, while at 1% renting is still ahead after 10 years.
- What ongoing costs should I add on top of the mortgage?
- Budget 2-3% of the property value a year for the full cost of ownership. That covers buildings insurance at £200-£400, maintenance at 1% of value, which is £2k a year on a £200k home, and a boiler service at about £100. Flats add service charges of £1k-£5k and leasehold ground rent of £100-£500. Big-ticket repairs sit outside that figure, with a boiler replacement at roughly £3k, a roof at £8k and a kitchen at £10k.
- Am I better off renting and investing my deposit instead?
- That depends on the returns on each side. A £50k deposit invested in a Stocks and Shares ISA averaging 7% grows to £272k over 25 years. The same £50k used to buy a £250k home rising 3% a year produces a property worth £523k, although on an interest-only basis £200k is still owed at the end of the term. Renting also avoids stamp duty, legal fees and selling costs, which is why it tends to win over short horizons and lose over long ones.