Rent vs Buy Calculator
Compare the financial implications of renting versus buying a home based on your specific situation.
Calculator Inputs
Buy Scenario
£
£35,000
£
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This accounts for the physical deterioration of the property over time. The net appreciation is calculated as appreciation rate minus depreciation rate.
Rent Scenario
£
General Assumptions
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This is the annual capital appreciation rate you expect from investments. It affects how much your down payment could grow if invested instead of buying a home, and how much the monthly payment difference between renting and buying could grow if invested. Higher rates typically favor renting.
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This is the annual dividend yield you expect from investments. Dividends are assumed to be reinvested, contributing to the compound growth of your investments. The total investment return is the sum of capital appreciation and dividend yield.
Total return: 7.0% (Capital appreciation + Dividends)
25 years
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Inflation reduces the real value of money over time. In our calculations, inflation affects the real return on investments (nominal return minus inflation) and the future value of cash flows. Higher inflation rates generally reduce the advantage of long-term investments.
Monthly Cash Flow Difference
Buying costs £-0 more per month
This difference is assumed to be invested at 7.0% annual return, with a real return of 4.9% after inflation.