Landlord vs Tenant Cost Comparison

Landlord vs tenant cost comparison shows long-term financial position of buying vs renting. 400k property with 25% deposit (100k), 1,800/month mortgage vs renting equivalent for 1,500/month over 10 years. Owner builds equity through appreciation + paydown. Renter invests deposit at 7%. Outcome depends on local market and assumptions.

Example: 400k property, 25% deposit (100k), 1,800 monthly mortgage. Versus renting equivalent at 1,500/month, investing 100k at 7%. Over 10 years: owner has 537k equity (3% appreciation × 400k - mortgage balance). Renter has 197k investment growth. Owner ahead by 340k - but only if appreciation materialises.

Owning advantages: forced savings (mortgage paydown), appreciation, control, no rent rises. Renting advantages: flexibility, no maintenance, lower upfront cost, capital available for other investments. Key variable: local property appreciation. Long-term: 3-5% annually, slightly favouring buying. Hot markets (2010-2017): 8%+, strongly favours buying. Falling markets (1991-2020): renting wins decisively. Personal factors: stability, family, career mobility matter beyond pure math.

Quick example

With property price of 400,000 and deposit of 25% (plus monthly mortgage payment of 1,800 and monthly rent of 1,500), the result is 220,851.42. Change any figure and watch the output shift — it's often more useful to see the pattern than to memorise the formula.

Which inputs matter most

You enter Property Price, Deposit %, Monthly Mortgage Payment, Monthly Rent (equivalent property), and Time Period. Two inputs usually tip the answer one way or the other. Flipping each value past a round threshold shows which input moves the result most.

What's happening under the hood

Owner: equity from appreciation + mortgage paydown. Renter: deposit invested at alternative return. The formula is listed in full below. If the number looks off, you can retrace the calculation by hand — that's the point of showing the working.

Why run this

Running the numbers makes the trade-offs concrete. Small changes in the inputs can move the result more than intuition suggests, which is hard to judge without working it out.

What this doesn't capture

This is a simplified model that holds its assumptions constant. Real outcomes vary with market conditions, costs, taxes, and timing, so the figure is best read as one scenario rather than a forecast.