This post launches a rent-or-buy calculator that allows people to put in their own details, including assumptions about interest rates and growth in house prices and rents over the coming decades, and compares their wealth at the end of the period if they rented or bought. It also discusses some of the assumptions underpinning the calculator and answers to FAQs about it.
In this post, I take a look at the maths behind buying or renting. Amazingly, even in heady market of 2006, it was cheaper to buy than rent. With rates back down at very low rates, and generous mortgage interest relief, it is once again cheaper to buy than rent – and looks set to stay that way, unless there are significant changes to the tax system.
Annual savings for owning rather than renting, 2006-2009
