What the calculation compares
Two cumulative net costs, not two monthly payments. On the buying side, the calculation adds the down payment, the notaire fees, the mortgage payments made, the property tax and the upkeep, then subtracts what a sale would return at the end of the year being looked at. On the renting side, it adds the rent paid, which rises every year, and subtracts what the money tied up in a purchase would have produced if it had been invested instead.
On the default values, a €300,000 property, a €60,000 deposit, a 3.6% mortgage over 25 years and €1,200 of rent, buying costs €114,686 net after ten years. The breakdown: €84,000 of deposit and notaire fees, €145,729 of mortgage payments, €60,000 of tax and upkeep, minus €175,043 recovered on resale.
Renting costs €117,335 net over the same period. It adds €157,676 of rent, including the 2% yearly rise, and subtracts €40,341, what the €84,000 tied up by the buyer would have earned invested at 4% a year. The two curves cross in the tenth year.
- Property price and down payment: the part paid in cash and the part borrowed.
- Mortgage rate and term: they set the payment and the balance still owed at resale.
- Monthly rent: the comparison point, indexed on the yearly increase given.
- Horizon: the number of years the comparison is stopped at.
How to use the calculator
The six visible fields describe the essentials: price, deposit, mortgage rate and term, the rent on a comparable flat, and the horizon. The headline figure, the curves and the table recompute on every keystroke.
The advanced options hold the two assumptions that weigh most on the result without appearing on any contract: the yearly rent increase and the yearly home appreciation. Both sit at 2% by default.
The horizon is the field to move first. A five-year comparison and a twenty-year comparison do not answer the same question, and the number of years spent in the home is what decides which way the result goes.
All eight parameters fit in the page address. The "Copy link" button gives a URL that reopens the same comparison, figures included.
Reading the result
The headline figure is the break-even year: the first year the buying curve drops below the renting curve. On the default values that is year 10. Staying beyond it widens the gap in favour of buying, leaving before it leaves renting ahead.
"None" means the two curves do not cross within the horizon asked for. That is not a final verdict: with rent at €1,000 instead of €1,200, break-even disappears over ten years and comes back in year 15 once the horizon is stretched to twenty-five.
The reference rent moves the result a lot. At €1,200 break-even lands in year 10, at €1,400 in year 7. That follows: rent is the only cost that builds no equity, and the higher it is, the faster buying catches up.
What the calculation shows
Home appreciation does more than anything else. Over a twenty-five-year horizon, with every other assumption unchanged, break-even lands in year 5 at 4% yearly appreciation, year 10 at 2%, and year 25 at 0%. A flat market pushes the payback out to the end of the mortgage.
The mortgage rate pulls the same way, more quietly. Still over twenty-five years, break-even lands in year 6 at a 2% rate, year 10 at 3.6%, and year 17 at 5.5%.
Money tied up has a cost the monthly payment never shows. The €84,000 of deposit and notaire fees would have earned €40,341 over ten years invested at 4%. That sum is credited to renting in the calculation, and it is what explains why buying takes ten years to move ahead when the €1,214 payment sits close to the €1,200 rent.
Frequently asked questions
Is it better to rent or to buy?
The answer turns on how long the home will be lived in. On the default values, a €300,000 property against €1,200 of rent, buying costs more than renting up to year 9 and moves ahead in year 10. Below that horizon renting comes out cheaper, above it buying widens the gap.
What is the break-even year?
It is the first year the cumulative net cost of buying drops below the cost of renting. Before it, the buyer has paid notaire fees and interest that never come back. After it, the principal repaid and the home appreciation exceed what renting would have cost.
What does buying cost beyond the monthly payment?
The model counts 8% of notaire fees on purchase, €24,000 on a €300,000 property, 6% of costs on resale, and 2% of the price a year in tax and upkeep, €6,000 a year. Those three items account for most of the gap between a monthly payment and a real cost.
Is the opportunity cost of the deposit counted?
Yes. The deposit and notaire fees, €84,000 on the default values, are assumed invested at 4% a year on the renter's side. Over ten years that comes to €40,341, subtracted from the net cost of renting. Without that item, buying would look profitable much earlier than it is.
What happens if the home gains no value?
Break-even moves out sharply. Over a twenty-five-year horizon it lands in year 10 with 2% yearly appreciation and year 25 with 0%. Appreciation sits in the advanced options, which is where a flat market can be tested.
Is borrower insurance included?
No. The model includes neither borrower insurance, nor home insurance, nor moving costs, nor one-off works. Those items add to the cost of buying and push the break-even year further out.
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