Buy or rent?

"Should I buy or rent?" is the wrong question. It's actually: "Given my numbers, my city, and my horizon — which path leaves me richer?" This tool models both scenarios side by side, month by month, so you can see when (and if) buying pulls ahead.

The buy side tracks your mortgage payments, property taxes, condo fees, maintenance, insurance, and renovation costs — then grows the property's value at the appreciation rate you set. The rent side assumes you invest everything you'd otherwise spend upfront (down payment + closing + renovation) plus the monthly savings difference, and lets that portfolio compound at the investment return you choose.

Defaults are tuned for Italy (a typical apartment, prima casa IMU exemption, Italian mortgage rates, ISTAT rent adjustments), but every field is editable — change the numbers and it works for any country.

How the math works

Every month the model steps through both scenarios. On the buy side, you pay your mortgage (split into principal and interest), condo fees, and a monthly share of taxes, maintenance, and insurance. On the rent side, you pay rent — and if buying would have cost more that month, the difference goes into your investment portfolio.

At the end of each year, the property appreciates, rent increases, and the investment portfolio compounds. Buy net worth is the property value minus remaining mortgage balance (your equity if you sold). Rent net worth is the accumulated investment portfolio.

The break-even year is the first year where buy net worth exceeds rent net worth. If it never does within your horizon, renting wins.

What the defaults assume

• Property price €200,000 — a reasonable starting point for a mid-sized Italian city. Milan or Rome will be much higher.
• 20% down payment — the standard Italian bank requirement. Below 10–15% you'd need a CONSAP guarantee or similar, and you'll pay a higher rate.
• 3.5% mortgage rate, 25 years — in the ballpark of 2025 Italian fixed rates. Check Mutuionline or your bank for current offers.
• 3% closing costs — notary, registration tax (imposta di registro 2% for prima casa), and agency fee. Second homes are much higher (~6–8%).
• €0 IMU — prima casa is exempt. If this is a second home or investment property, you'll want to add the real IMU amount.
• 1% maintenance — the industry rule of thumb. Old buildings need more, new builds less.
• 1% property appreciation — Italian real estate has historically appreciated less than UK/US markets. Major cities do better; small towns may not keep up with inflation at all.
• 5% investment return — the real (after inflation) long-term return of a globally diversified equity portfolio. Conservative? Maybe. Aggressive? Also maybe. It's a middle ground.

What this doesn't model

• Tax deductions on mortgage interest (detrazioni interessi mutuo — 19% up to €4,000/yr for prima casa).
• Renovation tax bonuses (bonus ristrutturazione, superbonus, ecobonus) — these change frequently and can be significant.
• Selling costs (agency fee + capital gains tax if selling before 5 years).
• Capital gains tax on investment returns (26% in Italy on financial instruments).
• Vacancy periods, rate changes, job relocation risk, or the emotional value of having your own place.

These omissions mostly cancel each other out (tax deductions help buying; capital gains tax hurts renting), but your specific situation may tilt one way. Use this as a compass, then talk to a consulente finanziario before signing anything.

Related tools

• Compound interest calculator — see how the "invest the difference" side of the equation actually works, with compounding frequency options.
• FIRE calculator — if you're thinking about whether buying fits into an early-retirement plan, this is the next step.