Rent vs Buy Calculator Ireland

What this calculator is for

Rent versus buy is not a comparison between a monthly rent payment and a monthly mortgage payment.

Buying combines:

• a large upfront cash commitment;
• mortgage interest and principal repayment;
• ongoing ownership costs;
• exposure to changes in property value;
• eventual selling costs;
• and the accumulation of home equity.

Renting avoids many of those ownership costs and keeps the deposit and buying costs available for other uses, but it does not create property equity. A renter can only realise the investment side of the comparison if the money that remains available is actually saved or invested.

This calculator therefore compares two net-wealth paths rather than two first-month housing bills.

How the model works

The buyer purchases the home using the deposit and mortgage entered.

The renter begins with an investment portfolio equal to the cash the buyer commits to:

• the deposit;
• standard residential Stamp Duty;
• and the other buying costs entered.

Each month, the model then compares:

Buyer housing cash cost

with

Rent

The buyer housing cash cost includes the mortgage payment while a balance remains, maintenance and the fixed annual ownership-cost assumption.

If renting is cheaper in a month, the renter is assumed to invest the difference.

If owning is cheaper in a month, the buyer is assumed to invest the difference.

That treatment avoids a common modelling bias where only the renter is credited for saving a monthly advantage.

At each comparison point, the buyer’s home equity is valued as though the property were sold and the entered selling-cost percentage were deducted.

What the headline results mean

Starting monthly mortgage repayment

The scheduled repayment implied by the mortgage amount, rate and term entered.

It is not the buyer’s complete monthly housing cost because maintenance and fixed ownership costs sit outside the mortgage.

Stamp Duty + other buying costs

The modelled transaction costs paid at the beginning.

These are treated as money the renter can keep invested instead.

Buyer net position at end

The buyer’s modelled sale proceeds after selling costs and mortgage repayment, plus any monthly cash-flow advantage the buyer has invested along the way.

Renter investment portfolio at end

The renter’s modelled investment account after:

• the initial deposit and avoided buying costs;
• the entered investment return;
• and months where renting costs less than owning.

End-value difference

Buyer net position minus renter portfolio.

A positive figure means the buyer path finishes higher in that particular scenario. A negative figure means the renter path finishes higher.

It is a scenario result, not a forecast.

Advanced mode: the assumptions that actually drive the answer

The advanced inputs deserve more attention than the headline result.

Annual rent growth

This changes future rent month by month.

Do not assume one national rent-growth number represents the property you would otherwise rent. Location, tenancy, property type and future regulation can make actual rent paths very different.

House-price growth

This compounds the property value.

Because the home is a leveraged asset at the start, relatively small changes in long-run property growth can materially change the buyer’s final equity.

Run at least one low-growth scenario. Property appreciation is not guaranteed.

Maintenance

The calculator expresses maintenance as a percentage of the modelled property value.

That is a planning assumption, not an official Irish rule. Actual spending is uneven: some years may have little work; another may contain a roof, heating-system or major repair bill.

Fixed annual ownership costs

This field can represent costs such as LPT, buildings/home insurance and other recurring ownership expenses you want to include.

Use a figure based on your own property where possible.

Renter investment return

Treat this as a net return after the fees and tax treatment relevant to your actual investment.

A headline index return is not the same as the return a particular Irish investor keeps after fund charges and tax.

The calculator does not separately calculate investment tax. If tax is likely to be material, reduce the return assumption to a realistic net figure rather than entering an optimistic gross market return.

Selling costs

The buyer’s end position assumes the home is sold at the comparison date.

That makes the two sides more comparable because the buyer’s property wealth is converted to a liquidated value rather than being shown before exit costs.

If you expect a different selling-cost percentage, change it.

Worked example: why mortgage versus rent is misleading

Suppose:

• rent is €1,800 per month;
• the home costs €400,000;
• the buyer has a €40,000 deposit;
• the mortgage is €360,000;
• and the mortgage payment is close to the rent.

It would be tempting to conclude that buying is automatically preferable because part of each mortgage payment becomes equity.

But the buyer also commits the €40,000 deposit, pays Stamp Duty and legal/other acquisition costs, and faces maintenance and ownership costs.

The renter keeps that upfront cash available for investment.

Over a short holding period, transaction costs can dominate.

Over a long holding period, property growth, rent growth, investment returns and principal repayment have more time to compound.

The correct comparison therefore changes with the horizon.

Why the time horizon matters so much

Buying contains costs at both ends:

• acquisition costs at the start;
• selling costs if the home is eventually sold.

Those costs are large relative to a short ownership period.

A buyer who moves again after only a few years has had less time for:

• principal repayment;
• property appreciation;
• and any monthly ownership advantage

to offset the transaction costs.

The First modelled point buyer is ahead result in Advanced mode shows the first annual comparison point at which the buyer path reaches or exceeds the renter path.

If it says the crossover was not reached, that does not mean renting will always be ahead. It only means the buyer did not catch the renter within the period entered under those assumptions.

A crossover can also reverse in a different scenario. Do not treat the first crossover year as a guaranteed financial break-even date.

What happens after the mortgage is paid off

The model stops mortgage cash outflow once the scheduled balance reaches zero.

That matters if the comparison horizon extends beyond the mortgage term.

After payoff, the buyer can have a large monthly cash-flow advantage relative to rent, although maintenance and other ownership costs continue.

The calculator invests that advantage for the buyer under the same investment-return assumption used for the renter.

This is one reason a 35-year comparison can look very different from a 10-year comparison.

Use realistic Irish buying costs

CCPC guidance highlights that a home-buying budget extends beyond the deposit and includes items such as legal fees, Stamp Duty, valuation and insurance.

For a more detailed purchase budget, use the House Buying Costs Calculator first and transfer a realistic non-Stamp-Duty cost estimate into this model.

The standard residential Stamp Duty bands are built into the calculator separately.

Mortgage rates deserve their own stress test

This model holds the mortgage interest rate constant for the full comparison.

That is deliberately simple and transparent, but real borrowers may move between fixed and variable rates, refinance or switch.

A 30-year mortgage should not be read as a promise that today’s rate will last 30 years.

Use the Mortgage Calculator and Mortgage Switch & Rate Change Calculator to test alternative rates.

For Rent vs Buy, run the full model again with a mortgage rate that is 0.5–1 percentage point higher and see whether the conclusion changes.

Investment behaviour is a major hidden assumption

A rent-versus-buy model can make renting look attractive by assuming the renter invests:

• the entire deposit;
• all avoided buying costs;
• and every monthly saving

for decades.

Mathematically that is fair.

Behaviourally it is demanding.

If the renter would instead spend much of the available cash, the modelled renter portfolio will overstate what happens in real life.

The reverse can also be true: a disciplined renter with a diversified investment plan may accumulate substantial financial assets.

The calculator cannot predict behaviour. Use the investment assumption that reflects what you would actually do.

Homeownership gives concentrated exposure

A buyer’s wealth can become concentrated in one property, one local market and one housing type.

A renter’s invested assets can potentially be more diversified.

That difference is not captured by the end-value number.

Two scenarios with identical expected end wealth can have very different:

• liquidity;
• diversification;
• volatility;
• transaction friction;
• and ability to access the money.

Financial value is only one dimension.

Non-financial factors belong in the decision

This calculator intentionally does not assign a euro value to:

• security of tenure;
• ability to alter a home;
• desire to settle in one area;
• flexibility to move;
• maintenance responsibility;
• proximity to work or family;
• school preferences;
• or the emotional value of ownership.

Those factors can reasonably dominate a small modelled financial difference.

If the model flips between renting and buying after modest changes to assumptions, that is a sign that the financial case is not decisive.

Rent Tax Credit is not included

The calculator does not automatically add the Irish Rent Tax Credit to the renter scenario.

Eligibility and usable credit depend on the relevant Revenue rules and personal tax position.

If you may qualify, estimate it separately using the Rent Tax Credit Calculator and consider how it changes your effective housing cost.

Common mistakes to avoid

Comparing rent with the mortgage payment only

Part of the mortgage payment is principal, while ownership also creates costs outside the mortgage.

Ignoring the deposit’s opportunity cost

Cash used as a deposit cannot simultaneously remain in an investment portfolio.

Assuming the highest historical investment return

Use a return appropriate to the investment you would actually hold, after relevant fees and tax effects.

Assuming property prices only rise

Stress-test flat or weak property growth.

Ignoring selling costs

A paper property value is not identical to cash received after a sale.

Forgetting the holding period

Transaction costs matter far more over a short horizon.

Treating the crossover as a promise

It is simply the first point one deterministic scenario crosses another.

A useful three-scenario test

Instead of asking the calculator for one answer, create three versions.

Conservative for buying

Use:

• lower property growth;
• higher mortgage rate;
• higher maintenance;
• lower rent growth;
• and a reasonable renter investment return.

Central

Use assumptions you can defend from your actual situation rather than round numbers chosen to make one side look attractive.

Stronger for buying

Use:

• higher property growth;
• lower mortgage rate;
• higher rent growth;
• and somewhat lower renter returns.

If the same side remains ahead across all three, the modelled financial result is more robust.

If the result flips, focus on the assumptions and your non-financial priorities rather than on the headline number.

Frequently asked questions

Does buying always win over a long enough period?

No. A long horizon gives ownership more time to overcome transaction costs and repay debt, but rent growth, property growth, investment returns, interest rates and maintenance still matter.

Is mortgage principal a cost?

It is a cash outflow, but it also reduces debt and increases equity. That is why this calculator does not treat the entire mortgage payment as lost money.

Does the renter start with the buyer’s deposit?

Yes. The renter starts with the deposit plus the buying transaction costs the buyer pays.

What if the buyer is cheaper month to month?

The model invests the buyer’s monthly housing-cost advantage rather than ignoring it.

Does the calculator model tax on investments?

Not separately. Enter a renter return that is realistic after the fees and tax treatment relevant to your investment.

Does it include future mortgage-rate changes?

No. The entered mortgage rate is held constant.

Does it include the Rent Tax Credit?

No. Model that separately if relevant.

Does it include rent controls or future housing-policy changes?

No.

Method and limitations

The calculator amortises the mortgage monthly at the entered constant rate.

House value, rent and the investment portfolio grow monthly using annual rates converted to equivalent monthly growth.

The renter starts with:

deposit + standard Stamp Duty + other buying costs

The buyer starts with the property and mortgage.

Each month:

1. property value and rent move by the entered growth assumptions;
2. investment balances receive the entered return;
3. the mortgage accrues interest and receives the actual scheduled payment still due;
4. maintenance and fixed ownership costs are added to the buyer’s housing cost;
5. the side with the lower housing cost invests the difference.

Once the mortgage balance reaches zero, no further mortgage payment is charged.

At each chart point, buyer net wealth is:

home value after selling costs − remaining mortgage + buyer-side investment account

The renter’s position is the modelled investment portfolio.

The model is deterministic. It does not model investment tax separately, mortgage-rate resets, investment volatility, property-price volatility, renovation value, rent caps, tax on a non-principal property, scheme eligibility, changing household needs or the risk that the renter does not invest the assumed savings.

Useful sources

• CCPC — Understanding mortgages
• CCPC — Applying for a mortgage
• Revenue — Stamp Duty property rates