Rent vs Buy in 2026: Where Is Your Break-Even Point?

"Renting is dead money" is the line, but it is not always true. Buying carries heavy one-off costs and ties up your deposit. Whether it beats renting comes down to a single question: how long will you stay? Here is how to find your break-even point in 2026.

What you are really comparing

The honest comparison is not rent versus mortgage payment. It is the total cost of owning against the total cost of renting plus the opportunity cost of your deposit.

Owning costs include:

• Mortgage interest (the part that is not building equity).
• Stamp duty, legal fees and survey on purchase.
• Buildings insurance and ongoing maintenance.
• Service charge and ground rent on a leasehold flat.

Renting costs include:

• Monthly rent.
• The interest or investment return you forgo by locking cash into a deposit instead.

A worked example on a GBP 250,000 home

You are choosing between renting a flat at GBP 1,150 a month or buying the equivalent for GBP 250,000 with a 10% deposit (GBP 25,000) and a GBP 225,000 mortgage at 4.5% over 30 years.

Upfront buying costs:

• Stamp duty for a non-first-time buyer: 2% on the slice from GBP 125,000 to GBP 250,000 = 2% of GBP 125,000 = GBP 2,500. (A first-time buyer pays 0% up to GBP 300,000, so nothing here.)
• Legal fees and survey: roughly GBP 2,000 combined.
• So a non-first-time buyer is about GBP 4,500 out of pocket before moving in.

Monthly comparison:

• Mortgage repayment near GBP 1,140, of which a large early share is interest.
• Rent of GBP 1,150 is similar month to month, but renters keep the GBP 25,000 deposit working. At 4.5% in a savings account that is over GBP 1,100 of interest a year forgone by buyers.

The buyer recovers the GBP 4,500 of fees only as the rent saving and equity build up over time. Spread over the years you stay, the upfront costs shrink to a small annual figure, and after roughly three to five years the buyer is typically ahead. First-time buyers, paying no stamp duty, reach break-even sooner.

What moves the break-even point

The crossover year is sensitive to a few inputs:

• Stamp duty: first-time buyers break even faster because they skip it up to GBP 300,000.
• Mortgage rate: higher rates mean more interest, pushing break-even later.
• Local rent level: high rents make buying pay off sooner.
• House price growth: rising prices add equity and favour buying; flat prices favour renting.
• How long you stay: the single biggest factor, because fees are fixed but spread thinner the longer you own.

A simple decision rule

• Staying under 2 years: renting is usually cheaper once fees are counted.
• Staying 3 to 5 years: it is finely balanced; first-time buyer status often tips it to buying.
• Staying 5 years or more: buying usually wins on cost, plus you build equity.

None of this counts the non-financial side. Owning brings stability and freedom to decorate; renting brings flexibility to move for work without selling costs. But on pure pounds, the answer is not "buying always wins." It is "buying wins if you stay long enough to absorb the upfront costs."

To find your own crossover, plug your rent, deposit, rate and buying costs into our mortgage and stamp duty calculators, and check the current SDLT bands and first-time buyer relief on gov.uk.