How the calculator works

The model runs month by month. Each month, whoever has the cheaper housing invests the difference at the same return. Both sides do this, not just the renter: when rent overtakes the buyer's costs, the buyer's saving is invested too.

upfront  = deposit + purchaseTax + legalFees + survey + arrangementFee
renterPot(0) = upfront − tenancyDeposit
buyerPot(0)  = 0

each month m:
  buyerCost(m)  = mortgagePayment(m) + value(m) × maintenance% / 12
                  + buildingsInsurance / 12 + (serviceCharge + groundRent) / 12
  renterCost(m) = rent × (1 + rentGrowth)^((m−1)/12) + contentsInsurance / 12
  both pots grow by (1 + return)^(1/12)
  if buyerCost > renterCost: renterPot += buyerCost − renterCost
  else:                      buyerPot  += renterCost − buyerCost

At each year-end T:

value(T)        = price × (1 + priceGrowth)^T
sellingCosts(T) = value(T) × agentFee% + sellingLegal
buyerWealth(T)  = value(T) − mortgageBalance(T) − sellingCosts(T) + buyerPot(T)
renterWealth(T) = renterPot(T) + tenancyDeposit

The break-even year is the first year-end at which buyer wealth is at least renter wealth, searched up to 40 years whatever your horizon. The verdict compares the two at your horizon.

• England and Northern Ireland, SDLT: 0% to £125,000, 2% to £250,000, 5% to £925,000, 10% to £1,500,000, 12% above £1,500,000. First-time buyers pay 0% to £300,000, 5% to £500,000, with no relief above £500,000 (GOV.UK Stamp Duty Land Tax rates). Additional properties pay 5% more on every band from £40,000; non-UK residents pay 2% more (GOV.UK SDLT higher rates for additional properties).
• Scotland, LBTT: 0% to £145,000, 2% to £250,000, 5% to £325,000, 10% to £750,000, 12% above £750,000. First-time buyers' nil band is £175,000 (Revenue Scotland LBTT rates). The Additional Dwelling Supplement is 8% of the whole price (Revenue Scotland Additional Dwelling Supplement; legislation: LBTT Additional Dwelling Supplement Order 2024 (SSI 2024/367)).
• Wales, LTT: 0% to £225,000, 6% to £400,000, 7.5% to £750,000, 10% to £1,500,000, 12% above £1,500,000. Higher rates for additional properties: 5% to £180,000, 8.5% to £250,000, 10% to £400,000, 12.5% to £750,000, 15% to £1,500,000, 17% above £1,500,000. No first-time buyer relief (Welsh Revenue Authority LTT rates; higher rates legislation: LTT higher rates Regulations 2024 (WSI 2024/1311)).

The tests check the code against the worked examples these pages publish.

• Tax on investments. Returns are assumed to sit in an ISA, so no tax. The ISA allowance is £20,000 a year in 2026 to 2027 (GOV.UK Individual Savings Accounts), held there until April 2031 (HMRC ISA limits to April 2031); from 6 April 2027 no more than £12,000 of it can go into a cash ISA if you are under 65 (GOV.UK cash ISA limit reduction). Investing more than £20,000 a year outside an ISA would be taxed, which this calculator does not model.
• Capital gains tax. Not charged on the sale of your main home, so not modelled.
• Moving house. The model assumes one purchase and one sale. Moving again adds purchase tax and fees each time.
• Remortgage fees, early repayment charges, rent-free periods and letting fees. Not modelled.
• Insurance, service charge and ground rent stay at today's amounts; they do not rise with inflation.
• Tenancy deposit stays at its starting amount and is returned in full.
• Risk. Both paths use steady growth. Real prices, rents and returns move around, which the sensitivity panel only hints at.