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Rent or Buy?

Compare renting against buying over the period you actually intend to stay, including the costs of buying and selling that make short stays expensive.

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Cheaper over that period
Net cost of buying
Net cost of renting
Years before buying wins

Renting is not throwing money away and buying is not automatically an investment. Which is cheaper depends almost entirely on how long you stay, because the costs of buying and then selling are paid once and spread over that period.

Transaction costs are inputs here rather than assumptions — they vary from about 2% to well over 10% of the price depending on the country.

What is being compared

For buying: the deposit, every mortgage payment made during the stay, the yearly cost of owning, the cost of buying and of selling — less the equity you walk away with, which is the property's value at the end minus what is still owed. For renting: the rent, and nothing else.

Worked example

A 320,000 home with a 64,000 deposit at 6.5%, 5% to buy and 3% to sell, 1.5% a year to own, against rent of 1,500 a month and 3% growth. Over three years renting usually wins; over ten, buying does. The crossing point is what the calculator reports as the break-even.

The honest caveat

Price growth is a guess and the result is sensitive to it. Set it to zero and see whether the answer survives — if buying only wins on optimistic growth, it is a bet rather than a saving.

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Frequently asked questions

Why is buying so bad over short periods?

Because the cost of buying and selling is paid once regardless of how long you stay. Spread over two years it is punishing; over fifteen it is small.

Should I include the return I would earn by investing the deposit?

For a strict comparison, yes — renters can invest the deposit. This model leaves it out, which flatters buying slightly.

What growth rate should I assume?

Long-run housing growth in most markets is close to inflation. Anything above that is a forecast, and worth testing at zero.