Irish Calculators
Property

Rent or Buy a Home Comparison Calculator

Model renting and buying with the same starting capital and monthly budget, investing any cost difference. Property growth, rent changes and investment returns are scenarios, with ownership costs and taxes supplied by you.

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Your numbers

%
Monthly interest is the annual nominal rate divided by 12. This is not a fee-inclusive APR.
Your figures stay on this device.

How the calculation works

The comparison follows ending net wealth under renting and buying with the same starting cash and monthly budget. It recognises the renter’s invested deposit and the buyer’s home equity, while investing any ongoing cost difference for the cheaper option.

Grow both cash portfolios at the chosen return; invest each monthly cost difference. At the horizon add net home sale proceeds less mortgage debt to the buying portfolio.

  1. Set up the initial positions

    Buying uses the deposit and upfront costs; renting invests the same available cash. The mortgage funds the purchase price less deposit.

  2. Track monthly costs and investment

    Rent changes at annual steps, while mortgage payments follow their amortization schedule. The option with lower monthly outgoings invests the difference at month-end.

  3. Compare wealth at the horizon

    Buying adds the grown home value less selling costs and outstanding mortgage to its invested differences. Renting retains its accumulated investment portfolio.

Worked example: One year, zero rates and matched monthly budgets

Sample inputs demonstrate the method. They are not a forecast or product offer.

The first example buys a €12,000 home with twelve interest-free €1,000 payments and compares rent of €1,000 monthly. With no other costs or growth, neither side invests a monthly difference. After one year the buyer owns €12,000 equity and the renter has no portfolio, producing a €12,000 difference.

Home purchase price
12000
Deposit
0
Purchase costs paid upfront
0
Annual nominal interest rate (%)
0
Mortgage term in months
12
Comparison horizon in years
1
Initial monthly rent
1000
Annual rent change
0
Annual home value change
0
Annual effective return on cash
0
Monthly ownership costs excluding mortgage
0
Selling costs as share of sale price
0

Expected result

Buying ending net wealth
€12,000.00
Renting ending net wealth
€0.00
Buying minus renting wealth
€12,000.00
Worked example: Cash purchase and renting invest unused cash

Sample inputs demonstrate the method. They are not a forecast or product offer.

Home purchase price
12000
Deposit
12000
Purchase costs paid upfront
0
Annual nominal interest rate (%)
0
Mortgage term in months
12
Comparison horizon in years
1
Initial monthly rent
100
Annual rent change
0
Annual home value change
0
Annual effective return on cash
0
Monthly ownership costs excluding mortgage
0
Selling costs as share of sale price
0

Expected result

Buying ending net wealth
€13,200.00
Renting ending net wealth
€12,000.00
Buying minus renting wealth
€1,200.00

Understanding your result

Buying minus renting wealth is the difference between these ending positions. Mortgage principal is not treated as permanently lost: repaying it increases the equity included in buying wealth.

Results can change sharply with the horizon, growth assumptions and transaction costs. The model does not forecast a market price or calculate capital gains, investment tax or rent-control rules.

Questions you might have

Is repaid mortgage principal treated as a lost cost?

No. Mortgage payments reduce cash but principal repayment builds equity, which is included in the ending wealth.

Is the deposit’s opportunity cost counted twice?

No. The renter invests the deposit once; no separate opportunity-cost charge is also deducted from buying.

Choosing the right inputs

Deposit
Enter the cash committed to the purchase, no greater than the home price. The renter instead invests that amount plus the entered upfront purchase costs.
Monthly ownership costs excluding mortgage
Use monthly ownership costs excluding the mortgage instalment, which the engine calculates separately. These entered ownership costs remain nominally constant.
Annual effective return on cash
Supply an effective annual cash-investment return. Home growth and annual rent changes have their own assumptions and should not be substituted for this rate.
Comparison horizon in years
Use the same whole-year horizon for both options. It can differ from the mortgage term; any remaining loan principal is repaid from the modelled sale proceeds.

Common mistakes to avoid

  • Do not add a second deposit opportunity-cost charge; the renter’s investment already represents that opportunity.
  • Do not include the mortgage payment again in monthly ownership costs.

Assumptions to check

  • Home prices, rent increases and investment returns are scenarios. Ownership costs stay nominally constant; taxes must be included in supplied costs where appropriate.

Sources and method

Read our calculation and testing approach.