Renting or buying in the UK: is rent really ‘dead money’?
Compare renting and buying properly: mortgage interest, equity, maintenance, transaction costs, opportunity cost, flexibility and the assumptions that determine the result.
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Buy vs Rent Calculator UK: Which Could Leave You Better Off?
Compare household wealth under matched buying and renting scenarios across several time horizons.
1 Enter your figures2 Review assumptions3 Explore the result
Your figures
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10-year buy versus rent comparison in today’s money
Buying is ahead by £30,022Both scenarios begin with the same capital and invest whichever monthly option is cheaper.How to read the result
The difference compares modelled net wealth after 10 years. Buying includes the property value, investments and remaining mortgage balance. Renting includes the investment account built from money that would otherwise have funded the purchase and any higher monthly ownership costs.
Buying net wealth£148,756
Renting net wealth£118,734
Mortgage payment£1,529/mo
Accessible comparison
Buy versus rent comparison in today’s money
| Year | Buying net wealth | Renting net wealth | Difference | Ahead |
|---|---|---|---|---|
| 0 | £50,000 | £59,250 | £9,250 | Renting |
| 5 | £98,846 | £91,442 | £7,403 | Buying |
| 10 | £148,756 | £118,734 | £30,022 | Buying |
£59,250renter invests at the start+Monthly differenceinvested by whichever option costs less→5.0% a yearyour investment-return assumption
Investing the difference: the renter begins by investing the deposit, transaction tax and buying costs. Each month, the model compares rent with mortgage payments, maintenance and service charges; the cheaper option invests the gap. This keeps the comparison on equal financial footing.
First year buying overtakes renting
Year 4This is the modelled buy-versus-rent break-even point under the assumptions entered. Change the horizon and growth assumptions to test whether it remains stable.Assumptions used
- The renter invests the deposit, transaction tax and buying costs at the start.
- Each month, the cheaper option invests the difference in household costs.
- The home is sold at the chosen horizon and selling costs are deducted.
- Tax reliefs, surcharges, mortgage product changes and personal investment tax are not calculated automatically.
This household-wealth comparison cannot capture security, flexibility, maintenance effort or the personal value of either home. Verify transaction tax using the official calculator for your jurisdiction.