Question 1

How does this calculator compare renting to buying?

Accepted Answer

The calculator works out the net financial cost of each option over your chosen period. For buying: all money paid out (stamp duty, legal fees, mortgage payments, maintenance) minus the equity you have built up (property value minus remaining mortgage). For renting: total rent paid minus the extra growth your deposit could have earned if invested instead. This gives a like-for-like comparison of what each option costs in real terms.

Question 2

What is the deposit opportunity cost?

Accepted Answer

When you buy, your deposit is tied up in the property. If you rent instead, that money could be invested, earning returns in a stocks and shares ISA, for example. The calculator estimates the investment growth you forgo by using your deposit for a house purchase rather than keeping it invested. This is often called the 'opportunity cost' of home ownership.

Question 3

What rate should I use for property growth?

Accepted Answer

UK house prices have grown at around 3-5% annually over the long run, though this varies significantly by region and period. London has historically outperformed, while other regions have seen slower growth. Using 3% is a cautious assumption; 5% is more optimistic. Try both to see how sensitive the comparison is.

Question 4

What is the 1% maintenance cost?

Accepted Answer

Homeowners typically spend 1-2% of their property's value on maintenance and repairs each year. This covers things like boiler replacement, roof repairs, decorating, and appliances. Renters generally avoid these costs as the landlord is responsible. The calculator uses 1% as a conservative baseline.

Question 5

Does buying always win over the long term?

Accepted Answer

Not necessarily. The outcome depends heavily on property growth, mortgage rate, how long you stay, and what the deposit could earn if invested. In high-rental-yield areas or where property growth is slow, renting and investing the difference can outperform buying, especially over shorter periods. The break-even year shows when buying starts to become financially superior.

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