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After 25 years
Buying is ahead by £491,548
This compares net wealth if the home and investments were sold at the end of the period, including any annual housing cost savings.
- Buying net wealth
- £746,683
- Renting net wealth
- £255,135
- Total homeowner costs
- £641,030
- Total rent costs
- £666,883
Net wealth over time
The lower cost option includes the cumulative housing outgoings difference.
BuyingRenting and investing
Year 25Buying £746,683Renting £255,135Difference £491,548
What the final net value is made up of
Cumulative differenes in annual housing costs are shown on the side that has lower overall costs and are assumed to not be invested.
- Buying
- Home value
- £732,822
- Less mortgage
- −£0
- Less estimated selling costs
- −£11,992
- Total housing outgoings saved vs renting
- £25,853
- Net wealth
- £746,683
- Renting and investing
- Initial investment
- £74,899
- Capital growth
- £178,736
- Refundable tenancy deposit
- £1,500
- Net wealth
- £255,135
Year-by-year comparison
Annual outgoings include the mortgage payments and other homeowner costs vs rent payments.
| Year | Buying wealth | Renting wealth | Difference | Mortgage left | Buying outgoings | Renting outgoings |
|---|---|---|---|---|---|---|
| Today | £76,399 | £76,399 | — | — | — | — |
| Year 1 | £80,295 | £85,305 | -£5,009 | £273,797 | £23,452 | £18,291 |
| Year 2 | £97,436 | £93,992 | £3,444 | £267,309 | £23,595 | £18,840 |
| Year 3 | £115,194 | £102,459 | £12,735 | £260,523 | £23,743 | £19,405 |
| Year 4 | £133,593 | £110,702 | £22,892 | £253,426 | £23,895 | £19,987 |
| Year 5 | £152,658 | £118,718 | £33,939 | £246,002 | £24,051 | £20,587 |
| Year 6 | £172,412 | £126,506 | £45,906 | £238,237 | £24,213 | £21,204 |
| Year 7 | £192,883 | £134,063 | £58,820 | £230,116 | £24,379 | £21,841 |
| Year 8 | £214,098 | £141,386 | £72,711 | £221,621 | £24,550 | £22,496 |
| Year 9 | £236,084 | £148,475 | £87,609 | £212,737 | £24,726 | £23,171 |
| Year 10 | £258,871 | £155,326 | £103,545 | £203,444 | £24,908 | £23,866 |
| Year 11 | £282,491 | £161,939 | £120,552 | £193,724 | £25,095 | £24,582 |
| Year 12 | £306,974 | £168,312 | £138,661 | £183,558 | £25,287 | £25,319 |
| Year 13 | £332,353 | £174,444 | £157,909 | £172,924 | £25,485 | £26,079 |
| Year 14 | £358,663 | £180,334 | £178,329 | £161,802 | £25,690 | £26,861 |
| Year 15 | £385,940 | £185,982 | £199,958 | £150,169 | £25,900 | £27,667 |
| Year 16 | £414,220 | £191,387 | £222,833 | £138,002 | £26,117 | £28,497 |
| Year 17 | £443,543 | £196,550 | £246,993 | £125,276 | £26,340 | £29,352 |
| Year 18 | £473,949 | £201,471 | £272,478 | £111,965 | £26,570 | £30,233 |
| Year 19 | £505,479 | £206,151 | £299,327 | £98,043 | £26,807 | £31,140 |
| Year 20 | £538,176 | £210,592 | £327,585 | £83,481 | £27,051 | £32,074 |
| Year 21 | £572,087 | £214,794 | £357,293 | £68,250 | £27,302 | £33,036 |
| Year 22 | £609,095 | £220,599 | £388,496 | £52,319 | £27,561 | £34,027 |
| Year 23 | £652,796 | £231,554 | £421,242 | £35,657 | £27,827 | £35,048 |
| Year 24 | £698,633 | £243,057 | £455,576 | £18,229 | £28,102 | £36,099 |
| Year 25 | £746,683 | £255,135 | £491,548 | £0 | £28,385 | £37,182 |
Looking for another planning tool?
What does this tool include?
- A live graph comparing buying with renting and investing over up to 50 years.
- Interactive controls for house-price growth, investment returns, mortgage interest and rent inflation.
- Current residential purchase-tax calculations for England and Northern Ireland, Scotland and Wales.
- Optional Capital Gains Tax estimate for investments held outside a tax-free account.
- Mortgage balance, home equity, rent, upkeep, buying fees and estimated selling costs.
- A like-for-like cash comparison that keeps the lower-cost option's total housing saving as cash.
- A final wealth breakdown and year-by-year comparison table.
What is this tool for?
Use this comparison to explore how the financial differences between buying and renting could develop over time. It focuses on the cash needed to buy, housing outgoings, home equity and investments while leaving shared household spending out of the calculation.
The result is a planning estimate, not a prediction or a recommendation to buy, rent or invest. Property prices, rents, mortgage costs and investment values can rise or fall, and personal circumstances can matter as much as the financial result.
How the comparison works
- Both options have the same starting cash and the same amount available for monthly housing outgoings.
- The renter's starting investment is the buyer's required upfront cash after renter setup costs and the refundable tenancy deposit.
- The option with lower total housing outgoings keeps the cumulative difference as cash. No interest or investment return is added to this cash saving.
- Mortgage payments use a repayment mortgage with one interest rate for the selected term. Mortgage principal reduces the outstanding balance and is retained in home equity.
- House-price growth, investment returns, rent inflation and cost inflation are compounded monthly from the annual rates entered.
- From Year 1 onwards, the buying result deducts estimated selling costs. Full Private Residence Relief is used for an owner-occupied main home, so no Capital Gains Tax is deducted from the home.
- The investment return should be entered after platform fees and investment charges but before Capital Gains Tax.
- For a taxable investment account, the tool treats all investment growth as a capital gain and estimates CGT if the account were sold at each year shown. The entered tax-free gains allowance is used once and does not build up over time.
- Shared costs that would be broadly the same in both homes, such as food and utilities, are left out.
Common questions
How does the rent vs buy comparison keep the two options fair?
Both options start with the same available cash. The renter invests the upfront cash not used to buy, while the option with lower total housing outgoings keeps the difference as cash without earning a return on it.
Does the comparison treat the whole mortgage payment as a cost?
No. Mortgage interest is a cost, while the principal part reduces the mortgage balance and builds home equity. The tool tracks both parts separately.
Are tax and investment fees included?
Residential purchase tax is estimated from the selected UK location and buyer status. Enter an investment return after platform fees and fund charges but before Capital Gains Tax. You can treat investments as tax-free or estimate CGT on gains in a taxable account.
Why are selling costs deducted from the buying result?
The two net-wealth figures are compared as if the home and investments were turned into cash at the selected year. Including estimated selling costs makes short and long holding periods easier to compare consistently.
Source notes
- GOV.UK residential Stamp Duty Land Tax ratesCurrent residential rates, first-time buyer relief and higher rates for England and Northern Ireland.
- Revenue Scotland residential propertyResidential LBTT, first-time buyer relief and the Additional Dwelling Supplement.
- Welsh Government Land Transaction Tax ratesMain and higher residential LTT rates and bands.
- GOV.UK Individual Savings AccountsTax treatment and contribution rules for ISAs.
- GOV.UK Capital Gains Tax rates and allowancesCurrent individual CGT rates and the annual tax-free gains allowance.
- GOV.UK Private Residence ReliefWhen the sale of a main home can qualify for full Capital Gains Tax relief.
- MoneyHelper home buying and selling costsConsumer guidance on mortgage, survey, legal, insurance, upkeep and selling costs.