About this tool
The Buy vs Rent Decision Calculator answers the most common housing question of 2026: at today's mortgage rates and rents, am I better off buying or renting? It is a country-aware NPV model. You enter a purchase price, a comparable monthly rent, a horizon, and the model runs both paths in parallel: a buy path with mortgage amortisation, property tax, maintenance, insurance, and home appreciation; a rent path with rent inflation and the down payment plus annual housing-cost savings invested in a diversified equity portfolio.
The model handles seven jurisdictions with their own defaults. The US has the 750,000 dollar mortgage interest cap (IRS Publication 936). The UK has tiered SDLT plus the non-resident surcharge and no mortgage interest deduction. India has Section 24(b) for interest plus 80C for principal under the old regime. Singapore has Buyer's Stamp Duty plus Additional Buyer's Stamp Duty. The UAE has the Dubai Land Department 4 percent transfer fee. Each country's transaction cost and tax assumptions can be overridden in the inputs.
How it works
- Pick a country. Defaults for property tax, transaction cost, marginal tax, and mortgage rate update.
- Enter home price + monthly rent + horizon. The horizon is the key variable; 10 years is the canonical comparison.
- Tune appreciation + stock return. 3 percent home appreciation and 7 percent real stock return are long-run averages.
- Read the decision banner for who wins and by how much.
- Read the break-even year for when buy overtakes rent.
- Inspect the year-by-year table to see where the lines cross.
- Compare countries in the sensitivity rows below the chart.
The formula
The decision is not just "is rent less than mortgage". A high stamp duty (UK, Singapore, India) can erase a decade of appreciation. A high stock return makes the down payment opportunity cost dominant. A high marginal tax rate combined with mortgage deductibility (US, India) tilts toward buying. The break-even year is where the curves cross.
Country defaults used
| Country | Prop tax (% pa) | Round-trip (%) | Mortgage rate | Interest deduction |
|---|---|---|---|---|
| United States | 1.1% | 7% | 6.5% | Yes, up to 750K loan cap (itemised, IRS Pub 936). |
| United Kingdom | 0.7% | 10% | 4.5% | No. Buy-to-let only gets a 20% basic-rate credit on interest. |
| Canada | 1.0% | 6% | 5.0% | No deduction on primary residence (cap gains exempt instead). |
| Australia | 0.5% | 8% | 6.2% | No deduction on owner-occupied; stamp duty is the big cost. |
| India | 0.5% | 9% | 8.5% | Yes, Section 24(b) up to Rs 2L interest + 80C 1.5L principal (old regime). |
| UAE (Dubai) | 0% | 6% | 4.5% | No personal income tax to deduct from. |
| Singapore | 0.8% | 8% | 3.5% | No deduction on owner-occupied. BSD + ABSD apply. |
Round-trip transaction cost includes stamp duty + legal + agent on purchase + selling agent + legal on exit. UK figure includes 5 percent SDLT band and 2 percent selling cost. Singapore figure excludes ABSD for citizens; non-citizens add 60 percent. India figure includes 7 percent stamp duty + 1 percent registration + 1 percent agent.
How to use the Buy vs Rent Decision Calculator
The Buy vs Rent Decision Calculator runs entirely in your browser. Pick a country, enter your purchase price and comparable rent, and read the decision banner plus break-even year. The tool is privacy-preserving by design: nothing is logged, no inputs leave your device, and the math runs in JavaScript on the page.
- Privacy: zero server round trips. Inputs disappear when you close the tab.
- Speed: results update as you type.
- Offline use: once the page is cached, it works without internet.
- No signup: no account, no email, no rate limits.
Step by step
- Pick a country. The currency symbol, tax callout, and country-specific defaults load.
- Enter the home purchase price for the property you are considering.
- Enter the comparable monthly rent for the same property if you rented it.
- Set the horizon to your realistic holding period. Default 10 years.
- Tune appreciation and stock return. Defaults are 3 percent and 7 percent real.
- Read the verdict, year-by-year table, and bar chart.
When you would use this
- Deciding to buy now or wait: at today's mortgage rates, rent is often cheaper monthly than ownership.
- Choosing between cities or countries: same income, different tax + stamp duty regime.
- Sense-checking emotional advice: "Rent is throwing money away" is wrong below the break-even year.
- Modelling a relocation: 3-year posting abroad almost always means rent wins.
- Stress-testing assumptions: change appreciation from 3 to 1 percent and watch buy lose 5 years of head start.
Frequently asked questions
When does buying win over renting?
Buying typically wins when (a) the holding period is at least 5 to 7 years, (b) home appreciation matches or beats stock market real returns, (c) you can claim the full mortgage interest deduction (US under the 750K cap, India Section 24(b) old regime), and (d) transaction costs amortise over the long horizon. Buying loses when transaction costs (stamp duty + agent + legal) consume more than the appreciation gain over your holding period.
When does renting plus investing win?
Renting wins when (a) the holding horizon is under 5 years, (b) stock returns clearly beat the local property appreciation, (c) you live in a high-stamp-duty country (UK, Singapore, India), (d) the difference between rent and total ownership cost can be invested at a real return above 5 percent, and (e) you value flexibility. The opportunity cost of the down payment compounding in equities is the dominant variable in most scenarios.
Why is 5 years the rule of thumb to break even?
In most developed markets the round-trip transaction cost is 8 to 12 percent of the home value (buying 2 to 5 percent + selling 5 to 8 percent + stamp duty). At typical 3 percent annual appreciation it takes 4 to 5 years to recoup. Below that horizon the renter who invests the down payment in equities at 7 percent real wins almost mechanically. This 5-year rule was popularised by the New York Times rent versus buy calculator and remains the cleanest mental model.
How does mortgage interest deduction change the math in the US and India?
US: mortgage interest deduction on the first 750,000 USD of acquisition debt is deductible from federal income tax if you itemise. At a 24 percent marginal rate, that subsidises about 1.7 percent of the loan rate. India old regime Section 24(b): up to Rs 2,00,000 of self-occupied interest plus principal under 80C up to Rs 1,50,000. The deduction lowers the effective cost of ownership in those countries but is zero in the UK, Canada, Australia, UAE, Singapore. Under the new Indian regime, the deduction is unavailable for self-occupied property.
Should I consider REITs or stocks as the rent plus invest leg?
Yes. The model assumes 7 percent real stock-market returns (long-run S&P 500 average per Damodaran NYU). REITs typically return 8 to 10 percent nominal with property-like exposure but with rental-yield risk. The point of the comparison is opportunity cost: the down payment is large enough that whatever you would do with it instead is the relevant benchmark, and a diversified global equity portfolio is the cleanest default for the comparison.
What about foreign-buyer surcharge?
Non-resident buyers face surcharges that distort the math. UK SDLT non-resident surcharge adds 2 percent. Singapore Additional Buyer's Stamp Duty on foreigners is 60 percent (up from 30 percent in April 2023). Canada has the foreign buyer tax (BC 20 percent, Ontario 25 percent). New South Wales surcharge is 8 percent. If you are buying as a non-resident, increase your transaction-cost input to reflect the surcharge applied to the gross purchase price.
What hidden costs are missing from this calculator?
Strata or HOA fees, body corporate levies, water rates, sewer charges, lender mortgage insurance (LMI) if your deposit is under 20 percent, special assessments for older buildings, garden maintenance, pest treatment, and the time cost of property management. We bundle these into the maintenance percent input. A realistic figure is 1.0 to 1.5 percent of home value annually. Council tax in the UK is captured in the property tax line. Insurance is included as a flat 0.3 percent of value where the country baseline applies.
How sensitive is the result to transaction cost assumptions?
Very. A 1 percentage-point change in selling costs at a 750,000 dollar home equals 7,500 dollars, which can move the break-even year by 6 to 12 months. India and Singapore are most sensitive because stamp duty alone exceeds 5 percent. UAE is least sensitive at 4 percent Dubai Land Department fee. If you plan to hold under 7 years, model the exit costs carefully and increase the input to reflect realistic agent + legal + transfer fees.
Is the Buy vs Rent Decision Calculator accurate?
The math is exact for the inputs you provide. Country defaults are blended planning figures. Real outcomes depend on the specific property, your marginal tax bracket, regional stamp duty bands, and whether you itemise (US). Use as a planning lens, then verify with a local adviser.
Is the Buy vs Rent Decision Calculator free?
Yes. 100 percent free, no signup, no payment, no API key. The site is funded by display ads that appear around the tool but not inside the calculation flow.
Are my inputs saved?
No. Inputs stay in your browser tab. Closing the tab discards them. The site uses anonymous traffic analytics but does not see what you type into the form.
Can I use this on my phone?
Yes. The tool is responsive and tested on iOS Safari, Android Chrome, and major desktop browsers. The country grid, table, and form scale to mobile.
How do I report a bug?
Email hi@3tej.com with the URL of this page and a description of what you saw vs expected. We respond within 72 hours and update calculators when tax or stamp duty rules change.
How accurate is the Buy vs Rent Decision Calculator?
The arithmetic is exact. The country defaults are blended planning figures, not your specific stamp duty band or marginal tax bracket. Real outcomes depend on the specific property and your tax situation.
Does this calculator work offline?
Yes. Once the page is loaded, it works without internet. The math runs in JavaScript on your device.
Why are results different from another buy vs rent tool?
Most US rent vs buy calculators assume the US 750K mortgage interest cap, no stamp duty, and a flat 5 percent selling cost. This one applies country-specific defaults and a country-specific deduction model.
How do I share results?
Screenshot the result block and country comparison table. The page does not generate shareable URLs for specific calculations - inputs stay in your browser only.