Amount borrowed: Mortgage interest rate: Rental yield: Mortgage deposit: Monthly rent: Deposit (%):     Inflation rate: Property inflation: Discount rate: Purchase price:      Mortgage payments:
Years:
Enter the amount that you intend to pay as a deposit on the property
Enter your estimate of what the average UK inflation rate over the period will be. For example you might use 2.0 per cent.
Set the slider to what you think the annual rate of house price change on the property in question will be. This number could be either positive or negative. It would be worth trying a few different forecast values to compare outcomes under different situations.
Set the slider value to the number of years you plan to stay in the property before selling. Generally, the longer you stay in a property, the more beneficial it is to buy rather than rent.
This is the annual rental amount expressed as a percentage of the property’s purchase price. This figure is calculated automatically using the information that you supply. For example, if the value of house is £100,000 and the tenants’ annual rent came to £10,000, then the rental yield would be 10 per cent.
Enter here the monthly cost of renting a property equivalent to the one you are considering buying.
This is the rate of return that you are missing out on for the money you put into the property as a deposit. Enter the risk free value (e.g. the rate you would get from a bank, which is generally about 5.5 per cent).
This is the expected monthly mortgage payment for an ‘interest only’ mortgage, given the mortgage interest rate you have entered.
Enter the rate for an interest only mortgage.
This is the purchase price less the amount you intend paying as a deposit.
This is the amount of deposit expressed as a percentage of the purchase price.
Enter the purchase price of the property you are considering buying.
 
Total buy: Total rent: Maintenance costs: Opportunity cost:
This refers to the amount you will spend on repayments over the time you plan to stay in the property.
This is the rent you would be paying over the period that you intend to stay in the property.
This is the cost you would incur if you sold the property. These include costs such as solicitor fees (estimated at £1,000) and estate agent fees (estimated at 1.75 per cent of the property’s value).
This is the approximate cost you would incur if purchasing your chosen property. This includes fees such as stamp duty and solicitor fees (estimated at £1,000).
This refers to the opportunity ‘lost’, i.e. the return your deposit would have made if invested elsewhere at the discount rate.
These are the annual costs associated with the upkeep of the house. This does not include any improvements to the property, just the cost of maintaining its value. This is estimated at 0.75 per cent of the property’s purchase price. If you are renting a property, it is usually the landlord’s responsibility to cover these costs.
This is the increase in value of a property. It is the difference between the original purchase price and the current price.
This is the profit you would make minus the costs you would face, if you bought the property. The costs include: the opportunity cost of the deposit, the one off costs (the expenses of buying and selling your home, which include stamp duty, estate agent fees and solicitor fees), the annual costs (maintenance of the property, which increases with inflation over time) and the mortgage costs. The profit would be the capital growth. If the capital growth exceeds the costs (i.e. the figure is above zero), you will make money on the property.
This is the total cost of renting. This includes the rent you would pay over the specified period, which incorporates the rental increase that you would experience. By comparing the total buy and the total rent, you can see which decision would make the most financial sense for you.
Total repayments: Cost of selling home: Rent over period: Cost of buying home:   Capital growth:
Some calculations are based on hidden inputs. These include fees such as stamp duty, solicitor fees (estimated at £1,000) and estate agent fees (estimated at 1.75 per cent of the property's purchase price).