The instinct that renting is "throwing money away" ignores the money buying throws away too — interest, transaction costs, maintenance and the return your deposit could have earned elsewhere.
What the Rent vs Buy does
Compares the cost of renting against buying over time, using a 350,000 property with a 70,000 deposit by default.
The comparison turns on how long you stay. Buying carries large one-off costs at both ends, and those only amortise over years — which is why the same purchase can be sensible at ten years and expensive at three.
Open the Rent vs Buy and follow the settings and checks below.
What the comparison involves
| Setting | What it means |
|---|---|
| Default price / deposit | 350,000 / 70,000 |
| Buying costs include | Interest, closing costs, maintenance, insurance, tax |
| Renting costs include | Rent, and rent increases over time |
| Decisive variable | How long you stay |
| Break-even | Commonly several years |
| Opportunity cost | What the deposit could earn invested |
| Not modelled | Job mobility, flexibility, security of tenure |
| Is this advice? | No |
How to use it
- Enter price, deposit and expected rent for the same standard of home.
- Include maintenance — commonly around 1% of value a year.
- Test it at three years and at ten. The answer often flips.
Practical advice
Run the comparison at several time horizons before deciding. Buying carries heavy costs at purchase and at sale, and those need years of ownership to amortise — so a purchase that looks poor over three years can look strong over ten. If your job or circumstances might move you within a few years, that fact matters more than any of the percentages.
Common questions
Is renting really throwing money away?
Not straightforwardly. Mortgage interest, closing costs, maintenance and the foregone return on your deposit are all money that does not build equity either. Early in a mortgage, most of the payment is interest rather than principal.
What is the break-even point?
It depends on prices, rates, rent and local transaction costs, and is commonly several years. That is why the horizon is the most important input here — and why the tool cannot give one universal answer.
What does it not account for?
Flexibility, job mobility, security of tenure, the stress of maintenance and the freedom to change a home you own. Those are real and they are not financial, but they decide plenty of cases.
Should I buy?
This compares costs; it cannot answer that. The decision involves job security, family plans, local market conditions and your own tolerance for risk. Speak to an independent financial adviser rather than a calculator.
Useful next tools
- Mortgage Calculator — Monthly payment, total interest and full amortisation schedule.
- Home Affordability — What price you can support on your income and deposit.
- Closing Costs Estimator — Estimate the fees on top of the purchase price.
- Rental Yield — Gross and net yield on a rental property.
- Mortgage Payoff — How much time and interest extra payments save.
- 50/30/20 Budget Calculator — Split take-home pay into needs, wants and savings.
Vootkit provides general educational estimates, not mortgage, investment, legal, valuation or financial advice. Lending rules, taxes, transaction costs and property markets vary. Check actual offers and consult appropriately licensed professionals before acting.
Try the tools from this guide
Keep reading
How to Calculate Cash-on-Cash Return for Property
Divides annual pre-tax cash flow by the cash you actually put in — deposit, closing costs and any initial works — rather than by the property price.
How to Estimate Home-Buying Closing Costs
Estimates the one-off costs of completing a purchase from percentages you set, defaulting to 1.5% and 0.75% components against a 350,000 price.
How Much House Can You Actually Afford?
Estimates the property price your income supports, from your deposit, existing debt payments and a debt-to-income limit.