Rent or buy — which is cheaper?
An honest monthly comparison: net interest after relief, the fee, running costs and what the down payment would have earned elsewhere. Amortisation counts as saving, not cost.
The two alternatives
Electricity, insurance and ongoing maintenance the landlord would otherwise cover.
Opportunity cost of the down payment. Set to 0 to calculate without it.
Title registration, mortgage deeds, inspection and moving.
1 438 kr
Difference in net cost per month, amortisation excluded.
5 513 kr/month
750 kr/month
4 500 kr/month
15 063 kr/month
60 000 kr in one-off costs divided by 1 438 kr lower monthly cost. That is roughly 3,5 years. Count in the agent fee when you sell again and the time gets longer.
Price growth is not included — it is a guess about the future, not a cost today.
What the calculation includes
The rent
A single item. Values cover maintenance, property insurance and unexpected repairs. No capital tied up.
Owning
Interest after relief, fee, running costs and maintenance. Plus amortisation, which is saving but still due every month.
The opportunity cost
What the down payment would have earned elsewhere. The item usually missing — and often the one that decides the comparison.
Two things make this comparison harder than it looks. The first is amortisation. It shows on the statement as spending, but it does not make you poorer — the money just moves from account to home. Counted as a cost, owning looks artificially expensive.
The second is the down payment's opportunity cost. The 300,000 kronor sitting in the home would have earned returns elsewhere. Without that item owning looks artificially cheap. Most online rent-or-buy calculators include the first error but not the second, which is why they almost always conclude buying wins.
Interest relief is included: 30 percent of the interest cost up to 100,000 kronor per year, then 21 percent. To see the full monthly cost of a specific purchase, it is in the housing cost calculator, and if you wonder whether the down payment stretches, use the down payment calculator.
Frequently asked questions about renting or buying
It depends almost entirely on the rate, the fee and how long you stay. At a mortgage rate around 3–4 percent, owning's net cost is often lower than the rent for an equivalent home in the same area, but the purchase carries one-off costs of 50,000–100,000 kronor. They must earn themselves back. Stay shorter than the break-even in the calculator above and renting is cheaper.
No, not in a cost comparison. Amortisation moves money from your account into your home — it does not make you poorer, just less liquid. It does belong in your cash budget, since it must be paid every month. The calculator shows both figures separately for exactly that reason.
What the down payment would have earned had it stayed in a savings account or funds instead of being tied up in a home. Put 300,000 kronor down and had it earned 3 percent a year, the opportunity cost is 9,000 kronor a year — 750 kronor a month. Most rent-or-buy calculators leave that item out. That systematically makes buying look cheaper than it is.
Because that is a guess about the future, not a cost. Add an assumed price rise and the comparison becomes a forecast whose result is set by the figure you chose yourself. The calculator compares what the two alternatives cost per month today. Price growth is a possible upside on top of that. It can also go negative.
Buying a tenant-owner apartment normally means inspection and moving, plus the association's transfer fee if passed to the buyer. Buying a house adds title registration at 1.5 percent of the purchase price plus 825 kronor, and mortgage deeds at 2 percent of the amount needing registration. Those are what break-even pays off.
The rule of thumb is that the purchase should earn back its own transaction costs, both at purchase and at the future sale. The break-even figure above covers only the buying side. Counting the agent fee when you sell, most land on a purchase needing three to five years to break even.