Quick answer
With our UK defaults (£290,000 home, £1,350 rent, 4.3% mortgage, 10% deposit), buying leaves you about £106,000 better off than renting after 10 years. Renting only wins if comparable rent is below about £794 a month. A Rent to Buy tenancy cuts rent to about 20% below market, which helps you save a deposit but doesn't change the long-run case for buying.
What does a rent to buy calculator tell you?
A rent to buy calculator answers two questions. Should you buy a home or keep renting, and if you’re renting, how much rent makes the two options equal? With UK defaults of a £290,000 home, £1,350 rent and a 4.3% mortgage, buying finishes about £106,000 ahead after 10 years. Renting only wins if a comparable home rents for less than about £794 a month. If you’re on the government’s Rent to Buy scheme, the same tool shows how much the discounted rent speeds up your deposit savings.
“Rent to buy” means two different things in the UK, and this page covers both:
- The Rent to Buy scheme. This is a tenancy at a reduced rent, designed to help you save a deposit.
- Comparing renting to buying in general. This includes the classic “how much rent equals a mortgage?” question.
How to use this calculator for a UK rent or buy decision
The UK preset already reflects how buying works here:
- No recurring property tax for owners. Council tax is paid by renters and owners alike, so it’s left out of both sides.
- Buying costs of 2.5%. This covers conveyancing, surveys, mortgage fees and moving. Stamp Duty Land Tax is zero for first-time buyers up to £300,000 under HMRC’s current rates. First-time buyers pay 5% between £300,001 and £500,000, and there’s no relief above £500,000. If you’re not a first-time buyer, standard rates on a £290,000 home come to £4,500, so raise this input.
- A 10% deposit and 25-year term, which are both common for first-time buyers.
- Rent growth of 4% against price growth of 3%. Both are editable and both make a big difference.
To use it, enter the price of the home you’d buy and the rent for a similar one. Set the horizon to how long you’d stay, then read three outputs: the verdict, the break-even year and the break-even rent.
Worked example: buying vs renting with UK defaults
Buying. A 10% deposit on £290,000 is £29,000. Add buying costs of 2.5% (£7,250) and you need £36,250 up front. The £261,000 mortgage at 4.3% over 25 years works out at about £1,421 a month using the standard repayment formula. Add maintenance at 1% a year (about £242 a month) and buildings insurance at 0.15% (about £36), and owning costs roughly £1,699 a month at the start.
Renting. Rent is £1,350 plus about £10 a month for contents insurance. The renter invests the £36,250 and the roughly £340 a month that renting saves.
After 10 years. The home is worth about £390,000 and the mortgage balance is down to about £188,000. After 2% selling costs, the owner’s equity is roughly £197,000. The renter’s portfolio is about £90,000. Buying leads by roughly £106,000, and it pulls ahead in year 2.
Why does buying win so clearly here when it doesn’t in the US? Owners pay no recurring property tax. Buying and selling costs are low by international standards. Rents are expected to grow faster than prices. And a 10% deposit means less money misses out on investment returns.
How to use the break-even rent output
The break-even rent is the monthly rent, in today’s money, at which renting and buying finish level at your chosen horizon. It works like a decision line:
- Your comparable rent is above it: buying is the better financial choice.
- Your comparable rent is below it: renting and investing the difference wins.
It changes a lot with the horizon, because buying and selling costs have to be recovered:
| How long you stay | Break-even rent | Buying wins if comparable rent is above |
|---|---|---|
| 2 years | ~£1,200 | £1,200 |
| 3 years | ~£1,020 | £1,020 |
| 5 years | ~£885 | £885 |
| 10 years | ~£794 | £794 |
With £1,350 rent, buying wins on every horizon from two years up. If you only expect to stay two years and could rent the same home for £1,150, renting would edge it.
Rent to buy ratio: a quicker check
The price-to-rent ratio is the home price divided by annual rent. Here it’s £290,000 ÷ £16,200, or about 17.9. Its inverse, the gross rental yield, is about 5.6%. These ratios are useful for comparing towns quickly, but they leave out your mortgage rate, deposit and horizon. The break-even rent includes all of them. Our guide to the price-to-rent ratio explains how to read it.
The Rent to Buy scheme: how it works
The facts below are from GOV.UK’s Rent to Buy guidance, checked in November 2026.
- Rent level: normally 20% below market rent.
- Where: England outside London. London has London Living Rent instead.
- Tenancy length: the first tenancy is for up to 2 years, and the landlord may extend it if you need more time to save.
- Who qualifies: you must be in full-time or part-time work, be a first-time buyer (or returning to ownership after a relationship breakdown), and be able to pay rent and save for a deposit at the same time. Landlords may check your income and credit history.
- Buying afterwards: you can use the savings to buy any home. If the landlord agrees, you may be able to buy the home you rent at its current market value, possibly through shared ownership.
Worked example: what Rent to Buy saves you
Say the home would normally rent for £1,350. At 20% off, you’d pay about £1,080. That saves £270 a month, or about £6,480 over a two-year tenancy, before any interest.
That’s a real help, but it’s well short of the £36,250 a full purchase needs on the defaults. Most tenants will need the discount plus their own regular saving. If you add £600 a month of your own, for £870 a month in total, you’d have about £21,000 after two years. That covers a 10% deposit on a home of around £170,000 with costs, or a larger share through shared ownership.
Should you stay on discounted rent or buy as soon as you can?
Put £1,080 into the calculator as your rent and compare:
| Rent | Horizon | Result |
|---|---|---|
| £1,080 (Rent to Buy) | 2 years | Renting ahead by ~£3,000 |
| £1,080 (Rent to Buy) | 10 years | Buying ahead by ~£55,000 |
| £1,350 (market) | 10 years | Buying ahead by ~£106,000 |
The scheme is worth using for its intended purpose, which is a short period of lower rent while you save. Over a long horizon, buying still comes out well ahead on these assumptions. Don’t let a comfortable discounted tenancy drift on longer than you need it.
Rent to buy mortgage calculator: what will the mortgage cost?
When your Rent to Buy tenancy ends and you apply for a mortgage, the rate you’re offered will set your monthly payment for the length of the fix. Here’s a £261,000 repayment mortgage over 25 years at different rates:
| Mortgage rate | Monthly repayment |
|---|---|
| 3.8% | ~£1,349 |
| 4.3% (default) | ~£1,421 |
| 4.8% | ~£1,496 |
| 5.3% | ~£1,572 |
Each half a percentage point adds roughly £75 a month. Most UK mortgages are fixed for two or five years and then move to a new deal, so test a higher rate as well as today’s quote. If £1,500 a month would stretch you, aim for a cheaper home or a bigger deposit before you leave the scheme.
Rent and buy decision checklist (UK)
- First-time buyer? Check whether Stamp Duty relief applies to your price.
- Leasehold flat? Add ground rent and service charges to the monthly fees input.
- Rent to Buy tenant? Use your discounted rent for the short-term view and market rent for the long-term one.
- Mortgage rate: use your broker’s quote, including the rate you’d move to when a two- or five-year fix ends.
- Horizon: if you could move within three years, check the three-year break-even rent.
- Price growth: test 1% a year. On the defaults, buying still leads by about £43,000 after 10 years, so the UK case holds up in a slow market.
Related tools and guides
- United Kingdom rent vs buy calculator: the UK preset with full notes.
- Rent vs buy in the UK: a guide to Stamp Duty, leaseholds and mortgage fixes.
- Shared ownership vs renting: the other main route for people who can’t yet afford a full deposit.
- Rent to own vs mortgage: how lease-option deals compare with a standard purchase.
These results are estimates, not financial advice. Speak to a mortgage adviser before you commit.
Frequently asked questions
What is the Rent to Buy scheme?
Rent to Buy is a government-backed scheme in England, outside London, where approved landlords let homes at a rent normally 20% below market so that tenants can save for a deposit. According to GOV.UK, the first tenancy lasts up to two years and can sometimes be extended. You need to be working, a first-time buyer (or returning to ownership after a relationship breakdown), and able to pay rent while saving.
Do I have to buy the home I rent under Rent to Buy?
No. GOV.UK says you can use the deposit you save to buy any home. You may be able to buy the home you're renting if the landlord agrees, at its current market value. Some landlords also let tenants buy it through shared ownership, provided you meet the shared ownership rules and can get a mortgage.
Is Rent to Buy available in London, Scotland and Wales?
Rent to Buy in its standard form covers England outside London. London has its own scheme, London Living Rent. GOV.UK says Rent to Buy isn't available in Scotland, Wales's Rent to Own scheme has closed to new landlords (though some homes may still be available), and Northern Ireland runs a different scheme.
What is a good rent to buy ratio?
The price-to-rent ratio divides the home price by a year's rent. Below about 15, buying tends to win over a typical stay. Above about 20, renting often wins. The UK default of £290,000 against £1,350 a month gives 17.9, which favours buying here because UK property tax is effectively zero for owners and transaction costs are low. Always check the break-even rent rather than relying on the ratio alone.
How much rent equals a mortgage?
On the defaults, a £261,000 repayment mortgage at 4.3% over 25 years costs about £1,421 a month. Add maintenance and insurance and owning costs about £1,699 a month. That's more than £1,350 rent, yet buying still wins over 10 years because each payment repays principal and the home's value grows. The break-even rent of about £794 is the fairer comparison.
Is rent to own the same as Rent to Buy?
Not in the UK. Rent to Buy is the regulated scheme run by housing associations and approved landlords. Private 'rent to own' or lease-option deals, which are more common in the US, usually involve option fees and contract terms that need careful legal review. Our guide to rent to own vs a mortgage explains the differences.