Rent vs buy

Buying isn’t really compared to renting. It’s compared to renting plus investing the money you would have used to buy. The down payment and closing costs are not free — they’re a chunk of capital that could be earning 7–10% a year in an index fund instead of sitting in walls.

Each side has monthly costs too. The buyer pays the mortgage plus maintenance plus tax. The renter pays the landlord. The difference between those two is real money, and whoever is paying less can invest the gap.

For any combination of price, rate, and rent, there’s usually a number of years after which buying overtakes renting + investing. Below that, you lose. Above that, you win. The shorter you stay, the more renting wins; the longer you stay, the more buying does.

That’s why the most important real-estate question isn’t “buy or rent?” — it’s “how long am I going to live here?”

EU mortgage rates have historically been lower than US rates, sometimes by a lot. That tilts the math toward buying. But long-run property appreciation in many European cities has been weaker than the US average too — so the appreciation assumption matters more than people realise.

Play with the appreciation slider above. 0–1% per year (typical for slow-growth EU cities) often makes renting a credible competitor for 10–15 year horizons.

Money isn’t the only axis. Owning means stability, autonomy over the space, and insulation from a landlord deciding to sell or hike rent. Renting means you can move in 30 days, your fridge breaking isn’t your problem, and you’re not exposed to a specific local property market.

If the financial picture is close, the lifestyle question usually wins. The math is only decisive when the gap is large.