Buy vs Rent + Invest Calculator

This calculator compares the total net wealth you'd hold after a set number of years if you bought a home versus if you rented and invested the difference. It's the financial version of the question most people ask the wrong way round — instead of "is my mortgage cheaper than the rent?", it asks "where do I end up after fees, maintenance and the lost return on my deposit?"

It matters because the monthly comparison flatters buying. Buying carries large one-off costs (stamp duty, legal fees, surveys), ongoing maintenance, and the opportunity cost of locking a deposit into a single illiquid asset. Renting carries rent inflation, no equity build-up, and no exposure to house-price growth. Each side has hidden numbers; this tool lines them up.

It's most useful for first-time buyers weighing whether to stretch for a deposit now, owners considering a downsize-and-invest, and anyone whose job or relationship status could change inside the next five years. It's least useful as a forecast — small shifts in mortgage rates, house-price growth or investment returns can flip the answer.

A worked example

Take a £300,000 home with a 10% deposit at a 5% mortgage rate over 25 years, against rent of £1,400/month, both modelled over 10 years. The buyer's true cost is interest + stamp duty + ~1%/yr maintenance + selling fees — not the full monthly payment, because principal becomes equity. The renter's wealth grows by investing the £30,000 deposit plus any monthly difference at, say, 5%. After 10 years the two sit within touching distance — and which one wins is decided almost entirely by house-price growth and how long you stay.

Why this matters

The honest answer to "should I buy or rent?" is rarely about the maths alone — but knowing the maths stops you making a decision purely on feel. Buying tends to win on long horizons (10+ years) and in rising markets. Renting tends to win when you might move, when transaction costs are very high, or when you can genuinely invest the difference rather than spend it. Use the result as a starting point for that conversation, not a verdict.

Common mistakes

• Treating the entire mortgage payment as a "cost" — most of the principal is forced saving.
• Forgetting stamp duty, legal fees, surveys and selling agent fees on the buying side.
• Ignoring rent inflation on the renting side — rent rarely stays flat for a decade.
• Assuming the deposit would actually be invested rather than spent if you rented.
• Using a single optimistic house-price growth number and treating the output as a forecast.

Beyond the numbers

Money is one input. The others rarely show up in a spreadsheet but often decide the answer: flexibility to move for work, who handles the boiler at midnight, whether you'd genuinely enjoy decorating a place that's yours, and the psychological weight of a 25-year mortgage versus a 12-month tenancy. A confident renter and a confident owner can both be right; what matters is matching the choice to the life you actually live in the next five to ten years. If a stretched purchase would block other goals — pension, career change, starting a family — the cheaper-looking option on the calculator may not be the cheaper one in practice.

Related tools: Mortgage Calculator · House Deposit Calculator · Stamp Duty Calculator · Mortgage Affordability