Is it better to rent or buy in your situation? Compare the true long-term financial cost of renting vs buying over your chosen time horizon.
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How This Works
Rent vs buy compares: total rent paid over the period vs total mortgage payments + buying costs − equity accumulated. The buy scenario benefits from property price appreciation and capital repayment building equity. The rent scenario benefits from flexibility and the alternative use of the deposit (modelled as 4% return in savings). The true answer depends heavily on assumed house price growth.
Not necessarily — it depends on your time horizon, local market, career stability and life plans. Buying is generally better if: you plan to stay 5+ years (recouping buying costs), the local market has strong growth, mortgage payments are competitive with rent, and you value security. Renting is better if: you may need to move soon, you are in an expensive city where yields are low, you have high-value alternative uses for your capital, or you value flexibility. The 2000s mantra "always buy" is overly simplistic.