usefulweb.appDependable little tools for people and AI agents. Ledgerly Rent vs Buy Calculator
Theme: Auto

Theme

Premium apps Part of Ledgerly

Ledgerly Rent vs Buy Calculator

Rent or buy? Break-even year, net worth over time, scenarios and a sensitivity table.

ISO code used for the labels, e.g. EUR, USD, CHF.

More options

Transfer tax, notary, land registry and agent fee, paid in cash on top of the down payment.

For example service charges or a home-owners association fee that is not maintenance.

Often 0 for an owner-occupied home; enter your local rate if a gain is taxed.

The opportunity cost: what the down payment and every monthly difference would earn if invested instead.

☁ Sign in to save to your Google Drive

Try an example: €380k flat vs €1,450 rent, 20 % down, 30 years · US house: $450k, 10 % down, property tax 1.1 % · Short stay: selling again after 5 years

More about this tool

How it works

Simulates buying and renting month by month: mortgage schedule, buying and selling costs, property tax, maintenance, insurance, rent increases and the return the renter earns by investing the down payment and every monthly difference. Shows the break-even year, net worth on both sides, home-price scenarios and a sensitivity table. Part of Ledgerly’s Reality Check.

  • The mortgage is a monthly annuity built with the same schedule engine as the Loan Amortization Calculator (integer cents, interest rounded per month).
  • Buying needs the down payment plus buying costs in cash; the renter invests exactly that amount instead. Each month the side with the lower costs invests the difference, so both sides spend the same money.
  • Owner costs: mortgage payment, property tax and maintenance (percent of the home value at the start of each year), insurance and other fees (growing with the cost increase). Renter costs: rent (growing with the rent increase) and renter’s insurance.
  • Net worth in year N: buyer = home value − selling costs − tax on the sale gain − remaining mortgage + invested surplus after tax; renter = invested savings after tax on the gains. The break-even year is the first year buying is ahead; “not stable” means it falls behind again later.
  • Scenarios move the home price growth by ± the scenario step; the sensitivity table varies price growth (rows, ±2 steps) and the investment return (columns, ±2 percentage points).

A model, not advice: house prices, rents and returns are uncertain, and local taxes and subsidies differ. Change the inputs to match your offer and check the sensitivity table before deciding.

Part of Ledgerly

  • Ledgerly Household finance & life-admin desk

    Budgets, bills, subscriptions, loans, contracts and deadlines on one private desk.

    Open Ledgerly

Related tools

How to use the Rent vs Buy Calculator

Compare buying a home with renting and investing the difference, find the break-even year and test how sensitive the answer is.

What it is for

"Should we keep renting or buy?" is usually answered by comparing the mortgage payment with the rent. That comparison is misleading: part of the mortgage payment is saving, while the down payment, the buying costs, maintenance and property tax are money you never see again. This calculator models both paths month by month so the answer is a net-worth comparison, not a gut feeling.

The buyer pays the down payment and buying costs up front and then the mortgage and running costs. The renter keeps that upfront cash invested, and every month whichever side pays less invests the difference. In each year the tool asks: if the home were sold now, who would hold more money? It does not know your local tax relief or subsidies — enter them as lower costs if they apply.

Worked example

A flat costs €380,000, a comparable flat rents for €1,450 a month. With the defaults — 20 % down, 10 % buying costs, a 3.6 % mortgage over 30 years, 0.3 % property tax, 1 % maintenance, 2 % yearly price growth, 2.5 % rent increases, 6 % selling costs and a 5 % investment return taxed at 25 % — the result is:

  • Monthly mortgage payment: €1,382, plus €114,000 upfront cash.
  • Owner costs in year 1: €1,844 a month, against €1,463 for rent and renter's insurance.
  • Break-even year: 11 — buying overtakes renting and stays ahead.
  • After 30 years: buying leaves you €257,214 ahead.

The scenario table shows how fragile that is: with 1 % price growth the break-even moves to year 19; with 3 % it comes in year 7. In the sensitivity table, a 6 % investment return combined with 1 % price growth means buying never catches up.

A shorter stay changes everything. A €300,000 home with 25 % down and €1,100 rent, compared over 5 years, never breaks even: renting and investing leaves you €32,468 ahead, mostly because buying and selling costs have no time to be recovered.

How to read the result

The break-even year is the first year in which the buyer's net worth (home value minus selling costs, sale tax and remaining mortgage, plus any invested surplus) is at least the renter's invested savings. "Not stable" means buying is ahead once but falls behind again.

Unrecoverable owner costs — interest, property tax, maintenance, insurance, fees and the lost return on your upfront cash — are the fair number to compare with rent. Principal repayments are not in it because they build equity.

The chart shows both net-worth lines; where they cross is the break-even. The year-by-year table lists home value, mortgage owed, costs and both net worths for every year.

Tips and common mistakes

  • Use a truly comparable rental: same size, area and quality as the home you would buy.
  • Do not leave maintenance at zero. One to two percent of the value per year is a common planning range for older homes.
  • Set the years to compare to how long you will realistically stay. Under about five years, buying rarely wins.
  • The investment return is the heart of the comparison. Check the sensitivity columns before trusting a single number.
  • Enter transfer taxes, notary and agent fees in the buying costs — they are lost on day one.

FAQ

Why does renting win in the first years even when rent is lower than the mortgage?

Buying costs and future selling costs are deducted from the buyer's net worth right away, and the renter's upfront cash keeps earning a return. It takes years of price growth and repayment to recover them.

Does the tool include inflation?

All amounts are nominal. Rent, insurance and fees grow with the rates you enter; house prices with the price growth.

Is the mortgage calculation the same as the Loan Amortization Calculator?

Yes. Both use the same schedule engine, rounded to the cent each month.

What about mortgage interest deduction?

It is not modelled. If you get one, lower the interest rate or the owner costs by the after-tax benefit.

Guide last updated:

For scripts and AI agents

  • JSON API: POST https://ledgerlyrentvsbuy.usefulweb.app/api/v1/calculate (same calculation as this page)
  • Interface description: OpenAPI 3.1 · AI guide: llms.txt
  • MCP server (Streamable HTTP): https://ledgerlyrentvsbuy.usefulweb.app/mcp · tool name ledgerly_rent_vs_buy
Example request
curl -s -X POST https://ledgerlyrentvsbuy.usefulweb.app/api/v1/calculate \
  -H 'content-type: application/json' \
  -d '{"currency":"EUR","homePrice":380000,"downPaymentPercent":20,"buyingCostsPercent":10,"mortgageRatePercent":3.6,"mortgageYears":30,"rentPerMonth":1450,"horizonYears":30}'
Feedback · ideas & bug reports welcome