The comparison everyone makes is the wrong one
"My mortgage would be £1,300 and rent is £1,250, so buying is basically the same." That sentence has three holes in it, and each one is worth thousands.
Start with the deposit. Forty-five thousand pounds in a house is forty-five thousand pounds not in an index fund, and that forgone return is a real cost of buying that never appears on a mortgage statement. Then there is the money that simply vanishes: stamp duty, solicitors, survey, and eventually an estate agent taking a slice of the sale. None of it comes back. The third hole runs the other way, in buying's favour. Rent buys nothing, while a mortgage partly buys equity, so some of that £1,300 is not a cost at all; it is moving from one pocket to another.
Put all three back in and the question changes shape. It stops being "which is cheaper per month" (buying is usually more) and becomes how long you have to stay for the purchase to have been worth it.
Same budget, two ledgers
Both households are given the same monthly budget, and whichever option costs less that month, the difference is invested at the return you set. That is the only honest way to compare them; otherwise one side is quietly handed spare cash to spend and the other is not.
The buyer's ledger, month by month: mortgage interest and principal, maintenance as a share of the property's value, insurance, and any service charge. The house grows at the rate you choose and the mortgage shrinks. Two simplifications sit inside that line. The model runs a single mortgage rate for the whole term, while real fixed deals end after two or five years and reprice into whatever exists then. And maintenance is a flat percentage, so a roof failing in year three, rental voids, landlord problems: none of the lumpy stuff appears on either side.
The renter's ledger: the rent, growing at its own rate, plus contents insurance. The deposit and all the buying costs, money the renter never had to spend, stay invested from day one. That portfolio grows untaxed here, which is realistic inside an ISA and not outside one.
At each year end, the buyer's position is what they could actually walk away with: the property's value, less the outstanding mortgage, less the cost of selling it. The renter's position is their portfolio. The break-even is the first year the buyer is ahead and stays ahead; an early crossover that reverses the following year is not a break-even. The model also assumes one clean purchase held to the end: no bridging, no chain collapse, no buying and selling costs in the middle if you move once and stay.
Purchase tax, wherever you are
Every jurisdiction charges the buyer something on the transaction, and the names differ more than the idea does: stamp duty in the UK and Australia, transfer tax in much of the US, land transfer tax in Canada, notary and registration fees across much of Europe. Local rules reach beyond the purchase too. Mortgage interest is deductible in the US and not in the UK; some countries tax a primary residence on sale and others do not. Where that applies to you it can move the answer by years, and none of it is modelled here.
The calculator handles the purchase tax itself two ways. Choose UK: England & Northern Ireland and it works the duty out from the bands below, including first-time buyer relief and the additional-property surcharge; the bands are published in full on GOV.UK. Choose anywhere else and it asks for a rate.
There is no dropdown of countries, and that is deliberate. Transfer taxes vary by state in the US and Australia, and by province and city in Canada: Toronto charges a municipal land transfer tax on top of Ontario's. A menu of national averages would produce confident numbers that are wrong for most readers. Looking up your own rate takes a minute and is right.
The UK bands
England and Northern Ireland, at the rates in force since April 2025.
| Portion of price | Standard | First-time buyer |
|---|---|---|
| Up to £125,000 | 0% | 0% |
| £125,001–£250,000 | 2% | 0% |
| £250,001–£300,000 | 5% | 0% |
| £300,001–£500,000 | 5% | 5% |
| £500,001–£925,000 | 5% | no relief |
| £925,001–£1,500,000 | 10% | no relief |
| Above £1,500,000 | 12% | no relief |
Second homes and buy-to-let add 5% to every band.
First-time buyer relief has a cliff worth knowing about: it disappears entirely above £500,000. Buying at £500,000 costs £10,000 in duty. Buying at £505,000 costs £15,250. The extra £5,000 of house costs you £5,250 in tax.
Scotland and Wales are different. Scotland charges LBTT and Wales charges LTT, both on their own bands. Switch to a rate for either; around 2–5% of the price covers most ordinary purchases in both, but check yours.
The two numbers that decide it
Everything else is detail. The answer turns on house price growth and investment return, and the gap between them.
House growth is the more powerful of the two, because of leverage. With a 15% deposit you get the growth on the whole property while having put down a seventh of it. That is why buying often wins on quite modest growth assumptions, and why it loses badly when prices fall, which is the same leverage running backwards.
Be honest with both. UK house prices have run a little above inflation over long periods, with decades that looked nothing like the average. A broad equity portfolio has done better than that historically, but not smoothly. Setting house growth to 8% and investment returns to 1% will tell you to buy; it will not tell you anything true.
The numbers also stay silent on the reason many people buy anyway. Security of tenure, the freedom to drill a hole in a wall, and not being asked to leave at two months' notice (what a landlord can and cannot do is set out in GOV.UK's private renting guide) appear nowhere in the output, and for many people they decide it.
If you are buying, the mortgage overpayment calculator shows what paying a little extra does to the term and the interest. If the deposit is still being saved, the savings goal calculator puts a date on it. And whichever way this lands, the result belongs in your net worth: a house is usually the largest line on it, and the mortgage the largest line against it.
What you get, in the end, is a break-even year under a set of guesses. Change the guesses and watch which direction the answer moves; that sensitivity tells you more than any single number the calculator produces.