— Free UK Property Tool —

Rent vs Buy Calculator

The honest financial comparison — equity built vs deposit opportunity cost, total cost of ownership, year-by-year projection, and break-even analysis. Updated for 2026 UK SDLT rates and house price data.

10-Year Projection Equity vs Opportunity Cost SDLT Included FTB & Mover Break-Even Year Total Cost of Ownership
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Your Scenario

1 · Property (Buying)
Property Price£
£
Buyer Type
Deposit%
%
Mortgage Rate5yr fixed avg ~4.5–5.5%
%
Mortgage Termyears
yr
Annual Maintenance% of property value
%
Service Charge (leasehold)£/year, 0 if freehold
£
2 · Renting
Current Monthly Rent£/month
£
Annual Rent IncreaseUK avg 3–5%
%
3 · Assumptions
Comparison Horizonyears
yr
Annual House Price GrowthUK long-run avg ~4%
%
Deposit Investment Returnif invested instead
%
Solicitor + Surveypurchase costs
£
↓ Methodology ↓
How this calculator works — formulas & sources
Total Cost of Buying
Total Buy Cost = Mortgage Payments + Property Tax + Insurance +
Maintenance − Equity Accumulated + SDLT + Legal + Survey
Mortgage payments use the standard amortisation formula. Equity accumulates through capital repayment plus property appreciation at your specified annual growth rate. All costs are projected over the comparison horizon.
Total Cost of Renting
Total Rent Cost = Cumulative Rent Paid − Deposit Investment Return
Deposit Investment Return = Deposit × (1 + Annual Return)ⁿ − Deposit
The deposit opportunity cost is the most important adjustment in any rent vs buy comparison. The deposit invested at your specified return rate represents what you give up by tying money into a property purchase instead.
SDLT Calculation
First-Time Buyer: 0% on £0–£300k · 5% on £300–500k
Home Mover: 0% on £0–£125k · 2% on £125–250k · 5% on £250–925k
BTL: Standard + 5% surcharge on all bands
SDLT is calculated using the correct banded method for the selected buyer type. The full SDLT cost is counted as an upfront purchase cost in year one.
Break-Even Year
Break-Even = Year where Cumulative Buy Cost < Cumulative Rent Cost
(calculated annually over the comparison horizon)
The break-even year is typically 5–7 years in the UK due to upfront SDLT and legal costs. Before this point, renting is usually more cost-effective even if mortgage payments are lower than rent.
Buying Advantage
Buying Advantage = Total Rent Cost − Total Buy Cost
Positive = Buying is cheaper over the horizon
Negative = Renting is cheaper over the horizon
The buying advantage represents the total financial difference over your comparison horizon. This includes all costs and the equity you would have accumulated through property appreciation and mortgage repayment.
Sources: HMRC SDLT guidance (April 2025 rates) · UK Finance mortgage amortisation standards · ONS UK House Price Index (long-run appreciation data) · BoE base rate history
Last reviewed: April 2026

Comparison Results

Buying Advantage over Renting
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⬤ Calculating…
Monthly Buy vs Rent
—
buy costs more per month
Equity at Year 10
—
property − mortgage
SDLT Due
—
stamp duty on purchase
Deposit if Invested
—
at year 10
Cost Breakdown
Buying Renting
Year-by-Year Buy Advantage
Buying ahead Renting ahead
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25-year projection, year-by-year equity tracking, and UK Rent vs Buy Guide — all included.

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How it works

The question most people ask wrong

Most rent vs buy comparisons only look at monthly payments. The real comparison is much more complex — and much more interesting.

01 — DEPOSIT OPPORTUNITY COST
The number most ignore

When you buy, your deposit is locked in the property. A renter could invest that same money. If you put £30,000 in a global index fund returning 7%, it becomes £59,000 in 10 years. This calculator compares what the deposit earns in property equity versus what it would earn if invested instead.

02 — EQUITY BUILDING
Forced savings through leverage

Every mortgage payment reduces your debt. Every year of house price growth increases your asset value. The combination is powerful — a 10% deposit controlling 100% of an asset growing at 3% annually generates 30% return on your cash in year one. No investment account gives you this leverage automatically.

03 — SDLT (STAMP DUTY)
The upfront drag on buying

Stamp duty is the single biggest reason short-term buying loses to renting. A first-time buyer purchasing at £300,000 pays £0 in SDLT — but a home mover pays £5,000. On a £500,000 purchase the home mover pays £12,500. This calculator applies the correct 2026 SDLT rates for your buyer type automatically, making it a real drag on the early years of ownership.

04 — RENT INFLATION
Why renting gets expensive

UK rents rose an average of 8–9% in 2023 and 6–7% in 2024. A £1,200/month rent growing at 3% becomes £1,612/month in 10 years. Your mortgage payment stays fixed. This is the inflation hedge that makes long-term buying compelling even when it looks expensive month-to-month in year one.

05 — THE BREAK-EVEN POINT
When buying finally wins

In the early years, renting almost always looks better — no SDLT, no maintenance, higher monthly flexibility. Buying typically breaks even financially after 5–7 years in UK markets. The projection chart below the calculator shows the year-by-year advantage, making the crossover point visible. Under 5 years: rent. Over 10 years: buy almost always wins.

06 — WHAT THIS IGNORES
The qualitative side

Numbers only tell half the story. Buying gives security, permanence, and freedom to decorate. Renting gives flexibility, no maintenance liability, and geographic mobility. A job change, relationship change, or city move can make the "financially better to buy" calculation irrelevant. This calculator handles the numbers — you handle the life decisions.

FAQ

Common questions

Is it better to rent or buy in the UK in 2026?
There's no universal answer — it depends on your deposit size, the property price, your rental cost, and how long you plan to stay. As a rule of thumb: if you plan to stay for under 5 years, renting is usually better financially because SDLT, legal costs, and estate agent fees on eventual sale take years to recoup. If you plan to stay over 10 years, buying almost always wins financially in the UK because mortgage payments stay fixed while rents rise, and equity compounds over time. This calculator gives you the exact numbers for your specific situation.
How does stamp duty affect first-time buyers vs home movers?
First-time buyers pay 0% SDLT up to £300,000 and 5% on the portion between £300,001–£500,000. Above £500,000, FTB relief disappears and standard rates apply. Home movers pay standard rates from April 2025: 0% up to £125,000, 2% on £125–250k, 5% on £250–925k, and so on. This means a first-time buyer purchasing at £300,000 pays £0 in stamp duty — a significant advantage over a home mover who would pay £5,000 on the same property. The calculator applies the correct bands automatically.
What is deposit opportunity cost and why does it matter?
When you use a deposit to buy a property, that money is tied up in bricks and mortar. The opportunity cost is what that money would have earned if invested elsewhere instead. A £30,000 deposit invested in a diversified index fund averaging 7% annually grows to £59,000 in 10 years. This calculator compares the deposit invested (rent scenario) against the equity built in the property (buy scenario) — which is the honest comparison most rent vs buy tools skip entirely.
How accurate are the house price growth and investment return assumptions?
These are assumptions, not predictions — and the result is highly sensitive to them. UK house prices have grown an average of ~4% annually over the past 40 years, but with significant regional variation (London and South East much higher historically, northern regions more volatile). Global equity index funds have returned 7–9% annually over long periods, but past performance doesn't guarantee future returns. The honest answer: run the calculator at multiple combinations (3%/7%, 5%/5%, 6%/4%) to see how the answer changes. The direction of the result is usually more reliable than the exact figure.
Should I buy if I can only afford a 5–10% deposit?
A small deposit makes buying more expensive — higher loan-to-value means higher mortgage rates, and the interest cost on a larger loan is significant. But small deposits aren't necessarily wrong for first-time buyers. A 5% deposit on a £250,000 property means a £12,500 deposit vs £52,000+ in mortgage interest over 10 years — but the mortgage replaces rent, and equity still builds. The key question is whether your monthly mortgage payment is affordable long-term, not just today. Use this calculator with your actual deposit and compare it against your actual rent to see the honest comparison.
Why does buying look worse in the early years?
Because the upfront costs are real and immediate — SDLT, solicitor fees, and survey must be paid on day one. Meanwhile the equity advantage of buying takes years to accumulate. In year one, a buyer has paid £5,000+ in transaction costs before making a single mortgage payment. A renter invested the equivalent deposit. It typically takes 5–7 years for the equity advantage of buying to overcome these upfront costs. The year-by-year projection in the results panel shows exactly when the lines cross for your specific numbers.