Renting
Buying
Shared assumptions
These apply to both options. Investment return is used in both scenarios, because in each case the money not spent on housing is assumed to be invested.
Based on your inputs, over 10 years you would be better off:
Renting by £0
Buying outcome
Renting outcome
Estimates only — not financial or tax advice. Figures assume a repayment mortgage held throughout, that the money not spent on housing is invested (the "invest the difference" approach), and that all rates stay constant. Stamp duty uses England & Northern Ireland residential rates for 2025/26; Scotland (LBTT) and Wales (LTT) use different systems and are not covered. Your actual costs, returns and tax will differ.
How this is calculated
The core idea — "invest the difference". Both options start with exactly the same money (the total cash a buyer needs upfront: deposit, stamp duty and buying costs) and the same monthly housing budget (the higher of the buying or renting cost each month). Whichever option is cheaper in any given month, the money left over is invested. Both scenarios grow their investments at the same return rate you set. This keeps the comparison like-for-like rather than favouring either side.
The buying side. The mortgage is fully amortised, so each month's payment is split into interest and capital in the correct proportions — early payments are mostly interest, so equity builds slowly at first. At the end of your chosen period we grow the property value, deduct selling costs and the mortgage still outstanding, and add that sale equity to any investment pot. Buying costs, stamp duty, maintenance and service charges are all counted.
The renting side. Rent rises each year by the increase you set. Because a renter typically spends far less upfront and often less each month, they invest the difference — both the upfront surplus and any monthly surplus. The tenancy deposit is returned at the end.
Stamp duty. Calculated on the standard England & Northern Ireland residential bands for 2025/26, charged slice by slice. First-time buyer relief and the additional-property surcharge are applied automatically based on your answers.
Assumptions matter. The result is highly sensitive to the rates you enter — particularly investment return, property growth and how long you stay. A higher investment return or lower property growth pushes the result toward renting; stronger property growth or a longer stay pushes it toward buying. All rates are assumed to stay constant, which real life won't. This is a guide, not a forecast, and not financial or tax advice.
This calculator is built to be impartial. Although Essential Living is a rental provider, the tool applies the same investment growth to both options and will show buying as the better outcome whenever your figures point that way. Change any assumption and the answer changes with it — we'd encourage you to try your own numbers.
