Continue your plan
Useful next calculations
When to use this calculator
- Before comparing mortgage products, brokers or repayment types.
- When you want to test how a different deposit, rate or term changes the payment.
- When you need a quick estimate before using a formal illustration or agreement in principle.
- When you are stress-testing your budget against a higher rate.
Example: comparing a home purchase with renting in UK
Use these sample inputs as a quick scenario test, then change one variable at a time to compare outcomes.
| Input | Value |
|---|---|
| Property price | £250,000 |
| Monthly rent | £1,600 |
| Deposit available | £50,000 |
| Decision horizon | 7 years |
Ownership can look cheaper month to month and still require far more cash up front. This example is useful because it makes that trade-off visible immediately.
How to read your results
Mortgage
The figure produced by this output for the inputs you entered. Change one variable at a time if you want to see what drives it.
Rent
The figure produced by this output for the inputs you entered. Change one variable at a time if you want to see what drives it.
Difference
The figure produced by this output for the inputs you entered. Change one variable at a time if you want to see what drives it.
Method & assumptionsAuthoritative sources
This calculator computes the monthly repayment mortgage payment on a capital-and-interest (repayment) basis using the standard annuity formula, then shows the difference against the monthly rent figure you enter. The mortgage payment is derived from the loan amount (property price minus deposit), the annual interest rate entered, and the mortgage term in years.
The comparison is a cash-flow snapshot only. It does not capture the equity built through capital repayment each month, any property value appreciation, the opportunity cost of the deposit if invested elsewhere, or the one-off purchase costs (property transfer tax, legal fees, survey). In the UK, property transfer tax applies on residential purchases in England and Northern Ireland; Scotland uses Land and Buildings Transaction Tax (LBTT) and Wales uses Land Transaction Tax (LTT), each with its own rate bands. These costs typically add 2–5% to the purchase price and should be factored into any genuine rent-vs-buy analysis over a realistic holding period of five years or more.
Common mistakes
- !Mixing up loan amount and property value, which can distort affordability and LTV.
- !Using a headline rate but forgetting fees, insurance, taxes or repayment type.
- !Testing only one term length instead of comparing the payment and total cost together.
- !Forgetting that a repayment mortgage and an interest-only mortgage produce very different monthly figures.
What to do next
- Run a second scenario with a higher rate or shorter term so you can see the downside clearly.
- Compare the result with an affordability or overpayment calculator before applying.
- Note the monthly payment and total interest for your strongest scenarios before you speak to a broker.
- Check whether a modest overpayment would reduce total interest — use the overpayment calculator next.
Frequently asked
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