Find out when buying becomes cheaper than renting. Compare total costs over time with our interactive calculator. Free.
A rent vs buy calculator compares the total long-term cost of renting a home against buying one, accounting for mortgage payments, taxes, maintenance, and rent increases over time. It identifies the break-even point where buying becomes cheaper than renting, helping you decide which option suits your finances.
After 1 years, buying becomes cheaper
Break-even Point
350.006,88 €
Total Cost of Renting
293.361,68 €
Total Cost of Buying
233.255,85 €
Net Worth if Renting
418.755,57 €
Net Worth if Buying
Last updated:
Rent vs Buy
Deciding whether to rent or buy a home is one of the most significant financial choices you will make. The answer depends on many variables: property prices, rent levels, mortgage rates, your investment alternatives, and how long you plan to stay in one location.
Unlike most rent-vs-buy tools that only compare monthly costs, our calculator models the full financial picture over time — including property appreciation, rent increases, investment returns on the down payment, and the true break-even point.
How It Works
In the renting scenario, you pay monthly rent (increasing annually) and invest the difference between what you would have spent on a mortgage and your rent, plus the down payment amount, in a diversified investment portfolio.
In the buying scenario, you pay the down payment upfront, make monthly mortgage payments, pay annual maintenance costs (1% of property value), and benefit from property appreciation. The break-even point is when buying net worth exceeds the renting investment portfolio value.
Key Metrics
A P/R ratio above 20 generally signals renting is more attractive; below 15 typically favours buying. In many European cities (Vienna, Lisbon, Sofia) the ratio sits in the 15–25 range, while London, Amsterdam, and Zurich frequently exceed 30.
Opportunity cost of the down payment: putting €40,000 into a down payment forgoes investment returns. At 7% annual return, €40,000 would grow to approximately €78,000 in 10 years. Our calculator factors in this opportunity cost.
Opportunity Cost
A down payment ties up a large sum of money that could otherwise be invested. If a down payment of €40,000 could earn 6-7% annually in a diversified investment portfolio, that forgone return is a real cost of buying that's easy to overlook when comparing to renting and investing the difference instead.
This is why a complete rent-vs-buy comparison should include not just monthly payment differences, but also what happens to the money you'd otherwise spend on a down payment, closing costs, and the portion of a mortgage payment that isn't building equity (interest, insurance, taxes) — all of which could be invested if you rent instead.
When Each Wins
Rent — short-term plans
If you expect to move within 5 years, renting almost always wins due to transaction costs.
Rent — high P/R ratio
When P/R exceeds 20 (like London or Zurich), renting is the financially rational choice.
Buy — long-term plans
Planning to stay 10+ years? Buying typically surpasses renting financially over that horizon.
Buy — low interest rates
Low mortgage rates dramatically improve the case for buying over renting.
Hidden ownership costs
Maintenance 1–2% annually, insurance, property tax, HOA fees — budget for all of these.
Transaction costs
In Bulgaria, combined purchase costs (notary, tax, agent) amount to 4–6% of the price.
Buying typically becomes better than renting after the break-even point, which depends on property prices, mortgage rates, rent levels, and investment returns. In most European cities, the break-even point is 5-10 years. If you plan to stay in one place for longer than the break-even period, buying is usually the better financial choice.
The break-even point is when the total cost of buying (including mortgage payments, maintenance, and opportunity cost of the down payment) equals the total cost of renting (rent plus the investment returns you could have earned on the down payment). After this point, buying becomes cheaper.
Beyond mortgage payments, homeowners face maintenance costs (typically 1% of property value per year), property insurance, property taxes, potential HOA fees, and major repairs (roof, heating, plumbing). These costs can add 20-30% to your monthly housing expenses compared to just the mortgage payment.
When you use savings for a down payment, you lose the potential investment returns on that money. For example, a €40,000 down payment invested at 7% annually would grow to about €78,000 in 10 years. Our calculator accounts for this by showing what your money would earn if invested instead of used for a down payment.
Historical property appreciation in Europe averages 2-4% per year, but varies significantly by location and time period. Urban areas tend to appreciate faster. For conservative planning, use 2-3%. The calculator lets you adjust this rate to see how different appreciation scenarios affect the rent vs buy decision.
Yes, this is a commonly overlooked cost called opportunity cost. If your down payment could earn 6-7% annually invested elsewhere, that forgone growth is a real cost of buying, and a thorough rent-vs-buy comparison should account for it rather than only comparing monthly payments.
This depends heavily on local price-to-rent ratios and transaction costs, but a common rule of thumb is that buying starts to make more financial sense after 5-7 years of ownership, since upfront costs (closing costs, agent fees) and the slow equity build-up in early mortgage years take time to offset.