Tools
Rent or Buy?
Every other calculator answers half the question, which is cheaper. This one answers that and the half a banker would never skip: is buying a home a safe position for you to hold? Two halves, honest numbers, nothing to sell.
Your situation
The assumptions — official defaults, all in today's money
World equities 1900–2024: 5.2%/yr real (UBS / Dimson-Marsh-Staunton).
ECB and US Federal Reserve target: 2%.
Typically 1–2%/yr, more for older homes (Harvard JCHS).
The money — is it the better deal?
Comparing only what you never get back on each side. Rent is fully spent; a mortgage hides its sunk part: interest, tax, upkeep, transaction costs — while the principal is savings.
Renting really costs / year
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Owning really costs / year
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The position — is it safe for you?
The half no other calculator shows. A home is the most leveraged, least liquid, most concentrated thing most people ever own. Read these as a warning system, not a scorecard — a single warning can outweigh the maths.
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Same number, different wealth
A euro in a portfolio is not the same as a euro locked in the home you live in. Here is what each path's wealth can actually do for you at the end:
If you rented + invested
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If you bought
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The home still pays you, in the rent you no longer owe, and the maths above already counts it. But that return arrives as a roof over your head, not as money you can spend. You can release the equity by downsizing, re-mortgaging, or an equity-release product — but each means moving, new debt with interest, or a costly contract. Not the same as selling a slice of a fund.
The honest conclusion
Run the maths and the risk lights, and you will have answered the question far better than most people ever do. But hold onto what the spreadsheet cannot see, on both sides.
A home you own is yours to shape. You can knock down a wall, paint it any colour, put down roots, keep a dog, let the kids mark their height on a door frame, and know that no landlord can ever ask you to leave. That security and freedom are real, and for many people they are the whole point. They are allowed to weigh on the scale.
But the same walls that make it yours also make it immobile and locked. It ties you to one city and one job market, it cannot be sold in a morning, and the wealth inside it is the one kind you cannot spend without giving up the roof. A portfolio is colder. You cannot live in an index fund. But it is liquid, it is diversified, and it will fund a life you actually get to choose.
The only thing worth insisting on is that you make it a clear-eyed choice — "I know what this costs me, and I want it anyway" — rather than a story you reach for afterwards to justify the leverage.
Whichever way you lean: the down payment should never come out of your emergency buffer, and the home should sit on top of a solid base. It doesn't replace one.
Sources — all figures retrieved Jul 2026
Home appreciation: FHFA House Price Index (All-Transactions, US: annual averages 61.06 in 1975 → 674.73 in 2024 = 5.03%/yr nominal) set against BLS CPI-U annual averages (53.8 → 313.689 = 3.66%/yr) → ≈1.3% real. Both legs are annual averages over the same 49 years; using a single quarter or a January reading for either shifts the answer materially; Eurostat House Price Index (euro area, volatile, no stable long-run average). · Property tax: US Census / American Community Survey (US average 0.89% effective, 2024); national statistics, generally lower and varies by country (euro area). · Transaction costs: NAR post-2024-settlement data (US ~8–9% round-trip); national transfer taxes + notary + agent fees, ~7–15% and varies by country (euro area). · Maintenance: Harvard Joint Center for Housing Studies; NAHB. · Investment return: UBS Global Investment Returns Yearbook 2025 — world equities 5.2%/yr real, 1900–2024 (Dimson, Marsh, Staunton). · Mortgage rate: Freddie Mac Primary Mortgage Market Survey (US, 30-year fixed, week of 30 Jul 2026); ECB bank interest rate statistics (euro area, fixation over ten years, Jun 2026). · Inflation target: ECB; US Federal Reserve. · Insurance: held fixed at 0.3%/yr — a working assumption, not a sourced figure; homeowner premiums vary far too much by state, country and property to average honestly. Adjust it against your own policy. · Withdrawal rate: 4% rule — Bengen (1994) and the Trinity study; a 30-year planning figure from US data, not a guarantee of income for life.
Illustrative model in today's money (real), framework only — not financial advice, and no promise of returns. Euro-area defaults are EU-wide averages; taxes and transaction costs vary widely by country, so adjust for yours. Assumes a 30-year mortgage and a 50/50 split of transaction costs between buying and selling. The renter is assumed to invest the down payment and every monthly saving.
You're answering the wrong half
Buying a home is the biggest money decision most people ever make, and most of them only ever look at half of it. When you put 20% down and take a mortgage, you are controlling an asset worth five times your cash. On a trading desk we would call that leverage: five to one, the kind that makes careers or ends them. It is the most leveraged position most people will ever hold. They just call it settling down.
None of that means buying is a mistake. It means the money question, is buying or renting the better deal?, is only the first half. The second, the one a bank checks long before it cares about the return, is: is this the right kind of position for my life, right now? Leverage, liquidity, concentration, time. The calculator above runs both.
Why "who has more" isn't the whole story
Even when buying wins on paper, the wealth it builds is a different kind of wealth. A portfolio is liquid. You can draw on it, spend it, and it is diversified across the whole market. Home equity is locked in the one asset you live in: you cannot spend it without moving, borrowing against it, or an equity-release product. The home still pays you, in the rent you no longer owe, but that return comes as shelter rather than as money you can use. Both are real. They are not the same.
Before you decide
The pieces around this decision
A home doesn't sit alone. It rests on a buffer, competes with what that down payment could grow into, and quietly assumes you'll keep your nerve. Three quick things worth checking.
What the down payment could become
See what that lump sum grows into if you invest it instead: the opportunity cost the housing decision hides.
ReadThe base a home sits on
The down payment should never come from your buffer. Here is the four-layer structure the home sits on top of.
ReadProperty without the leverage
Want the exposure without the illiquidity and concentration of one house? What REITs do and don't solve.
Questions people actually ask
Is renting throwing money away?
No. Rent buys you a place to live with no maintenance, no property tax and no transaction costs — and the freedom to leave. And a mortgage payment is not pure wealth-building either: interest, property tax, upkeep, insurance and the cost of buying and later selling are all money you never get back. The honest comparison is only the unrecoverable costs on each side — not rent versus the whole mortgage payment.
Is it better to rent or buy a home?
Financially it depends mostly on three things: how long you will stay, how fast homes appreciate versus what your investments could earn, and transaction costs. Over short horizons, renting and investing the difference usually wins; over long ones, buying often does. But money is only half the answer. A home is also the most leveraged, least liquid and most concentrated position most people ever take, and whether that position is safe for you matters as much as the maths.
How long do you need to stay for buying to pay off?
Long enough to outrun the transaction costs. Buying and later selling can total roughly 8–15% of the price, and those costs only make sense spread over many years. Below that break-even the costs alone can swallow any gain — which is exactly why a short or uncertain stay favours renting. The calculator works out your personal break-even year and the home appreciation rate you would need for buying to win.
What are the unrecoverable costs of owning a home?
The parts of ownership you never get back: mortgage interest, property tax, maintenance, insurance, and the amortised cost of buying and selling. Only the principal you repay is genuinely savings. That unrecoverable figure — not the whole mortgage payment — is the honest number to set against rent.
Should the down payment come from my emergency fund?
No. The buffer that covers your fixed costs in an emergency should stay untouched; the home sits on top of it, it does not replace it. Draining your safety layer to make the down payment turns a normal setback — a lost job, a broken boiler — into a forced sale at the worst possible moment.
Can I use the money tied up in my house?
Only indirectly, which is the point most people miss. Home equity is not spendable like a portfolio. To access it you have to sell (and then rent or downsize), re-mortgage (new debt with interest), or use an equity-release product (costly). Its real return is the rent you no longer pay — genuinely valuable, but it arrives as a roof over your head, not as cash you can spend.
Are rent vs buy calculators biased toward buying?
Many are, because they are run by lenders or estate agents who earn money when you buy — and they often bury an optimistic home-appreciation assumption or quietly ignore the opportunity cost of the down payment, both of which flatter buying. This one has nothing to sell: it puts those assumptions on sliders with named, official defaults, so you can see exactly how the answer moves when you change them.
What this tool is — and what it is not
- Runs in your browser
- Your numbers are never sent anywhere. There is no account, no sign-up and no server doing the maths. Analytics are cookieless and EU-hosted, and your IP address is not stored. The full privacy detail →
- Nothing to sell
- No course, no recommendation, no affiliate links, no ads. If that ever changes, it will say so here before it says so anywhere else.
- Not financial advice
- This is a model, not a personal recommendation. It does not know your tax position, your job security or how well you sleep. A decision this size belongs in a conversation with someone licensed to advise you.
- Who built it
- Philipp Misura — Nearly two decades in the financial industry — first inside the institutions, then advising them. More about Philipp →