People often ask whether buying is cheaper than renting. A more useful question is when it becomes cheaper. In almost every case buying starts out more expensive, because you pay buying costs on day one. Each year after that the gap can narrow, and at some point it may flip. That moment is the break-even point. Knowing roughly where it lies for your situation is far more useful than a general opinion about the housing market.
What the break-even point measures
To find it, you add up the cost of each option year by year and see where the lines cross.
- Renting: the rent you pay, rising each year, minus the return you could earn on the savings you did not spend on buying costs.
- Buying: the buying costs, plus interest after tax relief, maintenance and insurance, plus the cost of selling at the end, minus any rise in the home's value.
Repayments are left out of the buying side on purpose. Money used to repay the mortgage is not lost; it becomes equity that you get back when you sell. Leaving it in would make buying look far more expensive than it is.
The inputs that move it most
1. Rent compared with the price of the home
A handy rule of thumb is the price-to-rent ratio: the purchase price divided by a year's rent. A home costing €375,000 that would rent for €1,350 a month has a ratio of about 23. If the same home rents for €1,100, the ratio is about 28 and renting is relatively cheap. At €1,600 it drops to about 20 and buying looks relatively attractive. The higher the ratio, the later the break-even point.
2. House price growth
Value growth works directly against the cost of buying. Even 1 or 2% a year makes a large difference over a decade, because it applies to the full value of the home, not just to your own money in it.
3. The mortgage rate
Higher interest pushes the break-even point later. Mortgage interest relief softens this, but only partly: in 2026 you get at most 37.56% back.
4. Rent increases
Your rent rises, while the interest on a fixed-rate mortgage does not change until the fixed period ends. The faster rent rises, the sooner buying wins.
5. What your savings would earn
If you rent, the money you would have spent on buying costs can stay invested. A higher assumed return favours renting.
Worked example: three rent levels (estimate)
We take a €375,000 home, a 3.9% mortgage for the full price, buying costs of about €14,700, rent rising 3% a year and a 3% return on savings. Only the rent and the price growth change.
| Monthly rent | Price growth | Break-even | Renting after 10 years | Buying after 10 years |
|---|---|---|---|---|
| €1,100 | 0% | Not within 10 years | about €146,300 | about €148,000 |
| €1,350 | 0% | Year 6 | about €180,700 | about €148,000 |
| €1,600 | 1% | Year 3 | about €215,100 | about €111,300 |
The cost of buying is identical in the first two rows; only the rent differs. Yet at €1,100 buying does not catch up in ten years, while at €1,350 it does so in year six. A few hundred euros of rent a month moves the break-even point by years.
Reading the result sensibly
Treat it as a range, not a date
The break-even year depends on assumptions about prices and rents that nobody can know. Run at least three scenarios: prices falling slightly, flat, and rising modestly. If you expect to stay well past the break-even point in all three, buying is a sound choice. If you only pass it in the optimistic case, you are mainly betting on the market.
Compare it with how long you will really stay
A break-even point of six years means little if your contract or visa situation makes a move in four years likely. On the other hand, a later break-even point is no problem if you plan to stay twenty years.
Remember what the model leaves out
A calculation like this does not price flexibility, the stress of a large debt, the freedom to renovate, or the security of not facing a landlord's decisions. These can tip a close result either way, and only you can weigh them.
What happens after the break-even point
Passing the break-even point does not mean you are suddenly rich. It means the running total of what buying has cost you, after counting value growth and selling costs, is lower than the running total of renting. From then on the gap usually widens each year, because rent keeps rising while the interest on your mortgage falls slowly as you repay. In the €1,350 example, the gap after ten years at flat prices is about €32,700 in favour of buying. If you sold in year seven instead, the advantage would be much smaller, and if prices dipped just before you sold, it could vanish. The further past the break-even point you expect to stay, the more room you have for things to go wrong.
Practical tips
- Use a realistic rent for a comparable home, not your current rent if you have a long-running contract below market level.
- Include VvE contributions for apartments; they can add €100 to €300 a month or more to the cost of owning.
- Take a conservative maintenance figure for older homes.
- Recalculate when rates move by more than about half a percentage point; the break-even point shifts noticeably.
The rent-or-buy tool among the Hypozo calculators draws both cost lines and marks the year they cross, so you can try these scenarios in a minute.
Key takeaways
- The break-even point is the year the running total of buying costs drops below that of renting.
- Repayments are equity, not cost, and should be left out of the comparison.
- Rent level, price growth and the mortgage rate move the result most; small changes can shift it by years.
- Only treat buying as the cheaper option if you expect to stay well past the break-even point in a cautious scenario.
All figures in this article are estimates, not financial or legal advice.