Should I buy a home or keep renting?

Starting values: a $369,000 home and $1,950 a month in rent, the typical home value and asking rent (Zillow, Aug 2026),¹ and a 7.0% 30-year fixed rate (Freddie Mac, 2026-09-24).¹⁵ Growth over the last 10 years, which the calculator starts from: home values 5.9% a year, rent 4.2% (consumer price index for rent),¹⁶ stocks 14.7% (S&P 500 with dividends, 2016–2025).¹⁷ That was an unusually strong decade for stocks; forecasters expect less for the next one, 4.2–6.2% a year for US stocks in Vanguard’s outlook.¹⁸ Costs: property tax 0.9% of the home’s value a year (median tax paid ÷ median value),¹⁹ insurance 0.5% (the average homeowners premium, 2023),²⁰ maintenance 1%, buying costs 2.5%, selling costs 6.5%, and mortgage insurance of 0.5% of the loan a year below 20% down.¹² Taxes: 15% on price gains when you sell, the most that most people pay on long-term gains,⁸ and 15% on dividends (1.6% a year) as they’re paid. Home-sale gains are tax-free up to $250,000.⁷ We leave out the mortgage-interest deduction, which only helps if your itemised deductions beat the $16,100 standard deduction.⁶ Money in a 401(k) or IRA grows untaxed until you withdraw it, which would help the renter. Each metro uses its own Zillow values, its own consumer price index for rent and its state’s average insurance premium.

Starting values: an 80 m² owner-occupied flat. Prices are realised sale prices per m², Q2 2026: Copenhagen DKK 75,100, Aarhus DKK 43,400, Odense DKK 26,000, Aalborg DKK 21,400.² Rents are asking rents per m² a year from listings, 30 Sep 2026: Copenhagen DKK 2,724, Aarhus DKK 1,968, Odense DKK 1,452, Aalborg DKK 1,104.²¹ No official source publishes free-market rents, and regulated leases in older buildings are often far cheaper. Mortgage: 4.8% including bidrag, the mortgage bank’s fee: the average rate on new fixed-rate loans to households, 2026-08.²² Growth over the last 10 years: flat prices per m² in each city,² rent 1.8% a year (consumer price index for actual rents),²³ stocks 12.7% (MSCI World with net dividends, in DKK).²⁴ Costs: property tax as a new owner pays it since the 2024 reform, ejendomsværdiskat of 5.1‰ on 80% of the valuation²⁵ plus the municipality’s grundskyld (Copenhagen 5.1‰, Aarhus 6‰, Odense 5.7‰, Aalborg 7.4‰)²⁶ on 80% of the land value, taking land as a quarter of a flat’s value. Association fees, including building insurance, DKK 320 per m² a year (Boligøkonomisk Videncenter’s 2015 average carried forward with inflation). Maintenance inside the flat 0.5% a year. Buying costs 3%, mostly registration fees on the deed and the mortgage deed.²⁷ Selling costs 2.5%, about DKK 150,000 for the Copenhagen flat; an estate agent and the other costs of a sale typically come to up to about DKK 100,000,²⁸ so this errs high for pricier flats, which slightly favours renting. Taxes: interest and bidrag are deductible at about 33% on the first DKK 50,000 a year and 25% above, for a single person (the latest published figures, for 2024);⁴ investment gains are taxed as share income, 27% up to DKK 79,400 a year and 42% above (2026).⁵ We count the whole portfolio as sold in one year, which puts most of a large gain in the 42% bracket. Accumulating funds are taxed every year on unrealised gains instead: pick “Every year” in the calculator. Gains on selling your own home are tax-free.³

Starting values: a £247,000 terraced house in England and £1,440 a month in rent, the average price and the average rent of terraced houses (HM Land Registry, Jul 2026; ONS, Aug 2026).²⁹³⁰ Averages across all homes would mix different homes on each side, so both sides are priced for the same kind of home, and each city uses its own figures. Mortgage: 4.8%, the average quoted 5-year fixed rate at 75% loan-to-value (Bank of England, 2026-08).³¹ UK mortgages fix the rate for a few years, not 30: about half of new loans fix for three to five years and most of the rest for two or less,³² so we hold the 5-year rate for all 30 years. Below 20% down, we add the gap between the 95% and 75% loan-to-value rates on the whole loan until it’s paid down to 78% of the price; with 10–15% down the real gap is smaller.³¹ Growth over the last 10 years: terraced house prices 3.5% a year,²⁹ rent 4.0%,³⁰ stocks 12.6% (MSCI World with net dividends, in GBP).²⁴ For growth over 20 years, rents before 2015 follow ONS’s older index for the region.³³ Costs: no property tax, since council tax is paid by whoever lives in the home, tenant or owner;³⁴ buildings insurance £306 a year, the average premium paid in early 2026 as reported by the ABI, the insurers’ trade body;³⁵ maintenance 1%. Buying: a first-time buyer pays no stamp duty up to £300,000, 5% from there to £500,000, and the standard rates above that,³⁶ each city at its own price; plus conveyancing £1,421, a survey £462³⁷ and a £999 lender fee. Selling: the estate agent, about 1.3% of the price including VAT,³⁸ plus conveyancing £2,182 and an energy certificate £65.³⁹ Buying and selling together come to about £8,000 for the typical house. Taxes: there’s no tax relief on mortgage interest for a home you live in,⁴⁰ and no capital gains tax when you sell it.⁴¹ If you stay, you put up to £20,000 a year into a stocks and shares ISA, where gains and dividends are tax-free;⁹ the rest pays capital gains tax of 18% within the basic-rate band and 24% above it, after £3,000 a year tax-free.⁴² The basic-rate band ends at £50,270 of income,⁴³ so a median full-time employee, on £39,039 in 2025,⁴⁴ has £11,231 of it left for gains. Dividends (1.6% a year) are taxed at the same rates in the model; basic-rate taxpayers actually pay 10.75% on them above a £500 allowance,⁴⁵ and the ISA shelters most of them anyway. The model only puts new money into the ISA, so most of the starting cash stays taxable, which slightly understates staying. Stamp duty applies in England and Northern Ireland; Scotland and Wales have their own taxes on buying a home.⁴⁶

Starting values: a 72 m² flat with three or more rooms, the size the government’s rent map uses for such flats.⁴⁷ Prices are the median price per m² of those flats sold in the 12 months to December 2025;⁴⁸ in Paris that makes €720,000. Rents are predicted asking rents, including charges, for unfurnished flats let in the third quarter of 2025, from SeLoger and leboncoin listings, averaged over each city’s arrondissements by number of listings;⁴⁷ in Paris, €2,280 a month. Mortgage: 3.2%, the average rate on new home loans to households fixed for over 10 years, 2026-08.⁴⁹ French loans run 25 years at most,⁵⁰ so the model’s 30-year term understates what a French buyer pays each month. Growth over the last 10 years: flat prices in Paris and the Lyon and Marseille agglomerations, 1.6% a year in Paris;⁵¹ private-sector rents, 1.0% a year in the Paris area, with the rest of France standing in for Lyon and Marseille;⁵² stocks 12.7% (MSCI World with net dividends, in EUR).²⁴ Costs: taxe foncière, with the household-waste tax that tenants pay through their charges,⁵³ at each city’s 2025 rates⁵⁴ on half its average cadastral rental value of a home,⁵⁵ 0.2% of the price a year in Paris. Copropriété charges, which include building insurance and any shared heating, as the rents do: the median for owner-occupied flats, €1,800 a year in 2013,⁵⁶ carried forward with inflation, 0.3% of the price in Paris. Maintenance 1% a year, for the flat itself and the building works a copropriété votes outside its yearly budget. Buying costs 7.3%: transfer taxes of 5.81% for a first-time buyer of a main residence,⁵⁷⁵⁸ which other buyers in the three cities pay at 6.32% from April 2025 to March 2028,⁵⁹ plus the notary’s fees and disbursements, 0.79% and 0.70% of the price on average.⁶⁰ We leave out the loan’s guarantee, its arrangement fees and borrower insurance, which favours buying a little. Selling costs 4.5%, an estate agent’s commission: commissions averaged 5.78% of the price including VAT in 2022, but fall with the price, to 4.5% in the eighth tenth of sales by value and 3.8% in the top tenth.⁶⁰ Below 20% down we add nothing, as for Denmark: French lending limits are on income and term.⁵⁰ Taxes: no deduction for mortgage interest,⁶¹ and no tax on the gain when you sell your main residence.⁶² If you stay, you invest through a PEA, a share account whose gains pay no income tax after five years, only the 18.6% social contributions.¹⁰⁶³ We tax gains at 18.6% when sold and dividends (1.6% a year) as they’re paid, which a PEA doesn’t. A PEA takes at most €150,000 of contributions, and above that gains pay the 31.4% flat tax,⁶⁴ so for the Paris flat, where the cash up front alone is €197,000, this flatters staying. A PEA may hold only European shares and funds at least 75% invested in them;¹⁰ we use the world index anyway.

Starting values: an 80 m² flat in Berlin at €441,000, and €1,220 a month in rent. No source covers the whole country, so Germany is covered city by city. Prices are the average price per m² of flats sold: for Berlin and Hamburg, the 2025 averages their expert committees report;⁶⁵⁶⁶ for Munich, Cologne and Frankfurt, GREIX’s last four quarters, rounded to €100.⁶⁷ Rents are average asking rents per m² before service charges, from listings, Q2 2026.⁶⁸ Listings miss much of the cheaper end, such as flats that housing companies let through waiting lists.⁶⁹ Mortgage: 4.0%, the average effective rate on new housing loans to households with the rate fixed for over 10 years, 2026-08;⁷⁰ the model holds it for all 30. Growth over the last 10 years: flat prices in each city (GREIX’s quality-adjusted index; Hamburg’s ends in Q4 2024),⁶⁷ rent 1.7% a year (the consumer price index for net rents, which mostly tracks sitting tenants, as someone who stays would be),⁷¹⁶⁹ stocks 12.7% (MSCI World with net dividends, in EUR).²⁴ Costs: Grundsteuer and building insurance are left out on both sides, because landlords pass both on to tenants as service charges,⁷² and the rents here are before service charges. What owners pay and tenants don’t: the owners’ association’s management fee, 0.1% of the price a year, and upkeep, both at the model values German valuers use, indexed to inflation.⁷³ Buying costs: each state’s Grunderwerbsteuer, 6% in Berlin and Hesse, 3.5% in Bavaria, 5.5% in Hamburg and 6.5% in North Rhine-Westphalia,⁷⁴ about 1.5% for the notary and land registry,⁷⁵ and the buyer’s half of the agent’s commission, 3.57%.⁷⁶ Selling costs 3.57%, the seller’s half. Only about half of Hamburg’s flat sales in 2025 went through an agent,⁶⁶ so both err high. Taxes: owner-occupiers can’t deduct mortgage interest. Investment gains and dividends are taxed at 25% plus a 5.5% solidarity surcharge on that,⁷⁷ on 70% of an equity fund’s income,⁷⁸ after a €1,000 allowance a year for a single person:⁷⁹ 18.5% of each euro of gain. An accumulating fund is taxed each year on a notional return instead of payouts, 70% of a base rate (3.20% for 2026) times the fund’s value,⁸⁰ close to the dividends we tax each year, so the model treats both kinds alike. Selling a home you’ve lived in is tax-free.⁸¹ Below 20% down, lenders charge a higher rate on the whole loan; the surcharge varies by lender, so we add none: put in the rate you’re quoted.

Starting values: an 80 m² flat in Madrid, Barcelona, Valencia, Seville or Málaga. Prices are appraised values per m² from mortgage valuations, Q2 2026: €433,000 for the Madrid flat.⁸² Rents are the median rent per m² of flats let as main homes, from landlords’ 2024 tax returns,⁸³ carried forward to Aug 2026 with each region’s consumer price index for rent:⁸⁴ €1,120 a month in Madrid. They include older leases, so a new lease usually costs more: in 2024 rents on new leases rose 8.8%, against 2.8% on existing ones.⁸⁵ Mortgage: 2.8%, the average rate on new housing loans fixed for more than 10 years, 2026-08.⁸⁶ Growth over the last 10 years: flat prices in each city,⁸² rent from the same tax data and price index (3.8% a year in Madrid), stocks 12.7% (MSCI World with net dividends, in EUR).²⁴ Costs: IBI, the municipal property tax, is charged on a cadastral value that only changes when a city is revalued, so it comes to just 0.1% of market value a year in Madrid and at most 0.16% in Barcelona: each city’s 2026 rate⁸⁷ times the cadastral value of flats per m²⁸⁸ over the appraised value. Home insurance and community fees, €364 and €919 a year, the 2025 averages for households that pay them,⁸⁹ come to 0.3% of the Madrid price. Maintenance inside the flat 0.5% a year. Buying costs: transfer tax of 6% in Madrid, 10% in Catalonia, 9% in Valencia and 7% in Andalusia,⁹⁰ plus about 0.7% for the notary, land registry, appraisal and paperwork; the bank pays the costs of the mortgage deed.⁹¹ Selling costs 6.5%: an estate agent’s 5% average commission plus 21% VAT,⁹² and about 0.5% for the plusvalía, a municipal tax on the land’s gain.⁹³ Below 20% down the model adds no extra cost: 44% of new mortgages lend more than 80% of the price,⁹⁴ and a state guarantee lets buyers aged 35 or under, or with children, borrow up to 100%.⁹⁵ Taxes: mortgage interest isn’t deductible on homes bought since 2013.⁹⁶ Investment gains and dividends are taxed as savings income, from 19% on the first €6,000 a year to 30% above €300,000 (2026);⁹⁶ we use 22% up to €200,000 and 29% above, within 0.6% of the real tax on any gain from €100,000 to €1 million. A gain on selling your own home is tax-free if you buy another within two years or are over 65,⁹⁷ so we count it as tax-free.