How the calculation works
The calculator goes through every month of your period and keeps track of what each side owns.
Mortgage payment = loan × r ÷ (1 − (1 + r)−n), with r the monthly rate and n the number of months
If you buy: home value × (1 − selling costs) − mortgage left + money invested
If you rent: down payment invested + each month the difference in cost, invested
The cheaper option each month invests the difference between the monthly cost of owning and the rent.Worked example
Home of 400,000 with 40,000 down at 4% over 30 years.
- Loan: 400,000 − 40,000 = 360,000.
- Monthly rate: 4% ÷ 12 = 0.3333%, over 360 months.
- Payment: 360,000 × 0.003333 ÷ (1 − 1.003333−360) = 1,718.70 a month.
The calculator then compares that cost, plus upkeep, with your rent and shows what each side owns over time.
What this calculator does not include
- Tax benefits such as mortgage interest relief, and taxes on investment returns.
- Purchase costs, a change in the mortgage rate and extra repayments.
- The value of stability, freedom to move or the home you want to live in.
Amounts are rounded for display only; the calculation itself is not rounded. Results are estimates for information, not financial advice. Last updated: 13 November 2026.
Frequently asked questions
How does the rent versus buy comparison work?
It compares what you own after a number of years in both cases. If you buy, that is the home value minus selling costs and the mortgage left. If you rent, that is your down payment plus any savings, invested. Whichever option costs less each month invests the difference, so both sides spend the same.
What goes into the cost of owning?
The mortgage payment plus a yearly percentage of the home value for maintenance, property tax and insurance. A common rule of thumb is around 1% to 2% a year, but it differs a lot by country, home and age of the building.
What should I use for home price growth and investment return?
Use cautious numbers, because they decide the outcome. Try several values. Home prices and markets can fall for years, and the result changes quickly with a different growth or return.
Why is there a break-even time?
Buying starts behind because of selling costs and the interest you pay early on. The break-even time is the point after which buying stays ahead of renting. If it is not reached within your period, renting comes out ahead.
What is not included?
Tax benefits such as mortgage interest relief, purchase costs and taxes, changes in the interest rate, extra repayments, and the value of living where you like. These can change the answer. Check the rules in your country.