How to read the result
The headline figure is the difference in what you would have at the end of your stay if you bought instead of renting — after selling the home, clearing the mortgage and counting the interest your savings would have earned. It is not the difference in monthly bills.
The monthly figures put rent beside what a buyer pays each month: the mortgage, upkeep, and a service charge or buildings insurance. Part of every mortgage payment repays the loan, and you get that back when you sell, so a buyer can pay more each month and still come out ahead.
Buying starts behind. The deposit, stamp duty and fees go on day one and selling costs at the end, so the break-even year — when buying catches up — matters most if you might move within a few years. The line under the headline repeats the sums with prices flat: if buying only wins because the home goes up in value, the answer is less certain than it looks.
Finally, look at the deposit in months of rent. In much of the country the monthly bill is not what stops people buying; saving the deposit is.
Worked example: Birmingham and Camden
Both run on the calculator's defaults: a 2-bed flat, a 10% deposit, a 25-year repayment mortgage at the Bank of England's quoted rate for a 2-year fixed, 90% LTV mortgage (5.37% in September 2026), first-time buyer and a five-year stay. Rents are the median asking rent for 2-bed homes in October 2026; prices are the UK House Price Index average for a flat in July 2026.
Birmingham
- 2-bed asking rent
- £1,265 a month
- Typical flat
- £144,814
- Buying, a month
- £1,031
- 10% deposit
- £14,481 · 11.4 months of rent
- After five years
- Buying £29,170 ahead
Camden
- 2-bed asking rent
- £3,171 a month
- Typical flat
- £671,443
- Buying, a month
- £4,344
- 10% deposit
- £67,144 · 21.2 months of rent
- After five years
- Renting £103,554 ahead
In Birmingham, buying the typical flat costs £1,031 a month, £234 less than renting at £1,265. Carrying the area's five-year price trend (+0.5% a year) and the ONS rent change (+3.0%) forward, buying comes out £29,170 ahead after five years; with prices flat, buying is £25,587 ahead. A first-time buyer pays no stamp duty at this price.
In Camden, buying the typical flat costs £4,344 a month, £1,173 more than renting at £3,171. Carrying the area's five-year price trend (−1.5% a year) and the ONS rent change (+1.0%) forward, renting comes out £103,554 ahead after five years; with prices flat, renting is £55,662 ahead. Stamp duty adds £23,572 up front: at £671,443 the flat is above the £500,000 limit for first-time buyer relief.
The same 10% deposit is 11.4 months of rent in Birmingham and 21.2 months in Camden. That gap, more than the monthly bill, is why the answer changes so much from one town to the next.
The assumptions
Every one of these can be changed in the calculator. The ones marked as ours are round numbers, not official figures.
| Assumption | Starting value | Source |
|---|---|---|
| Rent | Median asking rent for the size you pick, from live listings | Dwellio — only where enough homes are listed (methodology) |
| Home price | Average price for the type of home in the council area | UK House Price Index, HM Land Registry |
| Mortgage rate | Quoted 2-year fixed rate at your loan-to-value | Bank of England — an average, not an offer |
| Deposit | 10% of the price | Our default |
| Mortgage | 25-year repayment, same rate after the fix | Our default |
| How long you stay | 5 years | Our default |
| House prices | The area’s average yearly change over five years, for the type of home | UK House Price Index |
| Rents | The area’s latest annual change in rents across all tenancies, not just new lets | ONS Price Index of Private Rents |
| Upkeep | 1% of the price a year | Our assumption |
| Service charge and ground rent (flats) | £120 a month | Our assumption — check the listing |
| Buildings insurance (houses) | £25 a month | Our assumption |
| Running costs rise | 2% a year | The Bank of England’s inflation target |
| Fees when buying | £3,000 | Our assumption — solicitor, survey, lender |
| Purchase tax | Stamp duty, LBTT or LTT, with first-time buyer relief where it exists | GOV.UK, Revenue Scotland, Welsh Revenue Authority — checked 18 October 2026 |
| Selling costs | 2% of the sale price | Our assumption — agent and solicitor |
| Savings | Quoted instant-access rate | Bank of England |
| Tenancy deposit | 5 weeks’ rent, returned at the end | Our assumption |
What the calculator leaves out
- Whether a lender would lend you this much. Most cap borrowing at a multiple of your income, whatever the monthly cost.
- Schemes that change the sums: shared ownership, a Lifetime ISA bonus, or a discount on a new build.
- Leasehold extras beyond the service charge, such as major works or extending a short lease.
- Tax on savings interest, moving costs, furniture, and the rate you would get when the fixed period ends.
For those, and for whether buying is right for you, MoneyHelper's free guide to buying a first home is a good place to start. This page is an illustration, not financial advice.
Rent vs buy questions
Is it cheaper to rent or buy in the UK?
It depends on the town, the size of your deposit and how long you stay. Buying costs more up front — the deposit, stamp duty and fees — and the monthly cost is mostly mortgage interest, upkeep and service charges. In much of the UK outside London, buying a typical flat at current mortgage rates costs about the same as, or less than, renting a two-bedroom home each month; in inner London it usually costs more. Put your own town into the calculator to see the answer with this month’s figures.
How does the rent vs buy calculator work?
It follows two households with the same savings for as long as you expect to stay. One buys: it pays the deposit, purchase tax and fees, then the mortgage, upkeep and service charge or insurance each month, and at the end sells and clears the mortgage. The other rents and keeps the cash the buyer spent up front in savings, apart from a refundable tenancy deposit. Whoever spends less each month saves the difference. The answer is how much better off one is than the other at the end.
What is the break-even year?
The first year after which buying leaves you better off than renting if you sold at that point. Buying starts behind because stamp duty, fees and selling costs are paid whatever happens, so the shorter your stay, the harder it is for buying to come out ahead.
Does the calculator include stamp duty in Scotland and Wales?
Yes. England and Northern Ireland use Stamp Duty Land Tax: first-time buyers pay nothing up to £300,000 and 5% on the part up to £500,000, and above £500,000 the relief does not apply. Scotland uses Land and Buildings Transaction Tax, where first-time buyers pay nothing on the first £175,000. Wales uses Land Transaction Tax, which has no first-time buyer relief. The bands were last checked against HMRC, Revenue Scotland and the Welsh Revenue Authority on 18 October 2026.
Where do the figures come from?
The rent is the median asking rent for that size of home from the listings Dwellio monitors, shown only where enough homes are listed. The price is HM Land Registry’s UK House Price Index average for the type of home in the local council area. The mortgage and savings rates are the Bank of England’s quoted rates for the month, and the rent growth default is the ONS Price Index of Private Rents, which measures rents across all tenancies rather than new asking rents.
Why is the mortgage rate an average?
The Bank of England publishes the average rate lenders quoted each month on new mortgages at each loan-to-value. It is a fair starting point, not an offer: the rate you are offered depends on the lender, your income, your credit history and the fees you choose. Type your own rate under Change the assumptions.
Is this financial advice?
No. The calculator is an illustration built on averages and on assumptions you can change. It cannot tell you what you can borrow or whether buying is right for you. MoneyHelper, the free government-backed service, has impartial guides to buying a first home.