Comparison
Buy or rent your home?
Adjust property, rent, and savings assumptions to see how long it takes for purchasing to beat renting.
Scenario result
Wait 23.7 years for buying to overtake renting
If the horizon is shorter, the renter's portfolio keeps the lead because savings & taxes beat early transaction costs.
| Monthly payment | 1 000 € |
|---|---|
| Average tenant savings | 134 € |
| Loan | 171 k€ |
| Interest | 69 k€ |
| Property price | 175 k€ |
| Down payment | 26 k€ |
| Closing costs | 13 k€ |
| Agency fees | 9 k€ |
| Annual property tax | 1 000 € |
Average tenant savings
134 € /mo
Difference between mortgage payment and average rent over the horizon.
Explanations
Best viewed on a laptop-sized screen.
What is this devilry?
How is it that renting could be more advantageous, especially over short or medium horizons? When you rent you never own the home, yet with a purchase every euro should be building equity—or so it seems.
Acquisition costs
The main reason is simple: buying real estate comes with large transaction costs. Agency fees and closing costs typically total around 13% of the property price. That is a significant check that instantly disappears the day you buy.
Loan interest
Mortgage monthly payments are higher than rent for a similar property because of interest. In the short term you often live in a more spacious home (while renting) for a lower monthly outflow.
Monthly savings
The gap between rent and a comparable mortgage payment is the monthly savings capacity. If you rent, you can invest that amount in addition to your down payment.
Leverage effect
When real estate appreciates, a purchase finally catches up thanks to leverage: you acquire a large asset and every small appreciation applies to the entire home value, not just to the principal you've repaid.
If property prices fall (negative appreciation), leverage works the other way around— an owner can lose more than a disciplined renter gains. Try setting a negative price evolution to see how fragile the purchase path becomes.