Rent vs buy calculator

How the calculator works

A rent-or-buy comparison is only as good as its rule for the money that isn’t spent on housing. This calculator uses one rule and states it: both households start with the same money and spend the same every month.

• At the start the buyer pays the purchase costs (transfer tax for the chosen state, about 2 % for notary and land registry, and the buyer’s half of a broker fee) and puts the rest of the own funds into the home. The renter invests the same own funds.
• Every month the owner pays the loan and maintenance; the renter pays cold rent. Service charges are paid either way and left out. Whoever pays less invests the difference, so both have the same outgoings.
• Growth is applied where it belongs. The home’s value grows by the home value rate, and maintenance with it. The rent rises by the rent rate once a year. Investments grow by the return you enter. Change any of them and the result moves.
• The loan is a German annuity loan: (rate + initial repayment) × loan ÷ 12 a month. If you assume a different rate after the fixed period, the payment stays the same and only its split changes.
• Net worth is the home’s value minus the loan plus investments for the owner, and the investments for the renter. Investments are shown after tax on gains, as if sold. A home you lived in is sold tax-free in Germany (§ 23 EStG). Switch on the sale to deduct 6 % selling costs.

Example: a €400,000 flat in Berlin

The flat costs €400,000; a comparable flat rents for €1,400 a month, cold. The household has €100,000 of its own. Purchase costs in Berlin with a broker come to €46,280, so the loan is €346,280, at 3.5% interest and 2% initial repayment: €1,587 a month.

In the first year owning costs €1,927 a month including maintenance, against €1,400 rent. The renter invests the difference and the €100,000 from day one. With home values and rents both growing 2% a year and a 7% return, the result after 30 years is:

• Buying: €765,882, a home worth €724,545 with the loan repaid, plus the owner’s investments.
• Renting and investing: €937,058 after tax on gains.

That puts renting ahead by €171,176. At a 7% return, Zenarios’ default for a shares-oriented mix, the renter’s investments grow faster than the owner’s equity, and the return is the assumption that matters most.

Which assumptions decide it

Test the result rather than trusting one number. Starting from the example:

• Home values growing 1 % a year instead of 2 %: renting ahead by €311,159.
• Rents rising 3 % a year instead of 2 %: buying ahead by €42,814.
• A 5 % investment return (a balanced mix) instead of 7 %: buying ahead by €200,011.
• No tax on investment gains: renting ahead by €344,199. The tax-free sale of an owner-occupied home is a real German advantage of buying.
• A rate of 5 % after a 10-year fixed period: renting ahead by €254,242.
• Moving after 10 years and selling: renting ahead by €54,027. Purchase costs need time to earn back.

Why growth rates have to be consistent

A comparison that asks for home value growth and rent growth but then uses only one of them can’t be right, and neither can one that grows the home but not its upkeep. Here both rates are applied: the home’s value and its maintenance grow at one rate, the rent at the other. If you expect both to track inflation, give them the same value. If you set home values rising faster than rents for decades, remember that the price-to-rent ratio then keeps climbing; that is a strong assumption.

What the calculator can’t see

It uses smooth averages, while house prices and markets move in cycles, and a home is one asset in one place. It doesn’t price flexibility: selling and buying again costs an owner roughly a tenth of the price, while a renter just gives notice. And it doesn’t know whether the higher monthly cost still fits with a child or part-time work. Check what price your budget carries in the home affordability calculator and the loan schedule in the mortgage amortization calculator. Zenarios compares buying and renting inside your whole plan, month by month, with your income, taxes and the decisions still ahead.

Common questions

Is it better to rent or buy in Germany?

It depends on the price compared with the rent, the interest rate, how prices and rents grow and how long you stay. In the example (a €400,000 flat in Berlin, €1,400 cold rent, €100,000 of own funds, 3.5 % interest, 2 % growth for both home values and rents, 7 % investment return) renting and investing is ahead by about €171,000 after 30 years. At a 5 % return instead, buying is ahead by about €200,000: the return assumption carries much of the result.

How does the calculator keep the comparison fair?

Both households start with the same money and spend the same each month. The buyer puts the own funds into the price and purchase costs; the renter invests them. Whoever has the lower monthly housing cost invests the difference. Net worth is the home minus the loan plus investments for the owner, and the investments for the renter.

When does buying pay off?

Not within 30 years in the example at a 7 % return: the owner starts €46,280 behind, the purchase costs, narrows the gap to about €24,000 by year 12 as the loan is repaid and the home gains value, then falls behind again as the renter's investments compound. At a 5 % return buying is ahead from year 9. Over shorter periods renting is usually ahead. After 10 years, selling at 6 % costs, renting leads the example by about €54,000.

Do I pay tax when I sell the home?

Not on a home you lived in yourself: § 23 EStG exempts property used only for your own housing, or in the year of the sale and the two years before. Investment gains are taxed, so the calculator deducts tax on the renter's (and the owner's) gains as if sold, 18.5 % by default, the approximate German rate for equity funds.

Sources

• § 23 EStG: private sales, exemption for own housing
• § 11 GrEStG: the federal transfer tax rate
• § 656c BGB: broker fees split equally between buyer and seller
• Verbraucherzentrale: Immobilienfinanzierung – so berechnen Sie, was Sie sich leisten können

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By Constantin Metz, the maker of Zenarios · Reviewed 25 October 2026. Results are estimates from your inputs and simplified rules, not financial, tax or legal advice. How Zenarios calculates