Renting vs buying in 2026: the honest math

The rent-vs-buy debate generates more heat than light because each side ignores half the ledger. Here's the full accounting.

The costs renters forget

Rent rises compound. A 5% annual escalation doubles your rent in 14 years, while a fixed-rate mortgage payment stays flat and then... ends. Renters also carry moving costs and the option-value loss of never locking in a neighbourhood.

The costs buyers forget

Ownership costs run 1–2% of property value every year: maintenance, taxes, insurance, society charges. Add transaction costs of 6–10% round-trip, which means buying only beats renting if you stay past the break-even horizon — typically 5–7 years.

The 5% rule of thumb

Multiply the property value by 5% and divide by 12. If comparable rent is lower than that number, renting is cheaper on cash flow; if higher, buying wins. Then adjust for your market's appreciation and your own discipline about investing the difference.

The verdict

Buy when your time horizon exceeds five years, your payment stays under a third of income, and you'd stop investing the savings anyway. Rent when flexibility has career value or when price-to-rent ratios in your city are stretched beyond 25.