How it works
Both start with deposit + purchase tax + buying costs in cash. The buyer spends it; the renter invests it after any renting upfront costs. Each month both receive a budget equal to the higher housing cost and invest any unspent difference at month-end. Mortgage principal builds equity; only interest is a borrowing cost. The final buying figure assumes a sale, deducting selling costs and the mortgage balance, then adding the buyer's investments.
Worked example
Worked example: a £100,000 home bought outright, no growth, investment return, fees or running costs, versus £500 monthly rent. With the same £500 monthly budget, the buyer invests £6,000 over a year: net assets £106,000 versus the renter's £100,000. This deliberately simple case checks the equal-budget comparison; it is not a realistic forecast.
Assumptions
Uses released 2026/27 residential purchase-tax rules for UK-resident buyers of a main home, subject to relief eligibility. Mortgage rate is fixed for the full model, with no remortgage or early repayment charges. Council tax and utilities are assumed equal and excluded; refundable renting deposits, moving frequency and capital-gains tax are excluded. Investment and property returns are smooth assumptions, not risk-adjusted forecasts. A 0% deposit is mathematically supported, not a claim a mortgage is available. Neither outcome establishes affordability or recommends a decision.