Rent vs Buy Calculator
Compare the total cost of renting versus buying over a holding period.
Input Data
Results
At a glance:Rent vs Buy compares the total cash outlay of renting versus home ownership over the same living period, helping you decide rationally in Hong Kong. Core comparison: total rent = monthly rent × years × 12; total buy cost = down payment + monthly instalment × months, where the instalment is an equal-monthly-repayment (annuity) amount and the loan = price × (1 − down payment ratio). Buying requires a large upfront down payment and stamp duty, so short holding usually favours renting; but the principal part of the instalment is forced saving and there may be long-term price appreciation, so the longer you hold, the lower buying's relative cost. This tool compares cash flow only, excluding price movement, rental yield, management fees and rates/rent.
Formula
Total rent = monthly rent × comparison years × 12.
Monthly instalment (annuity): loan = price × (1 − down payment ratio).
Total buy cost = down payment + monthly instalment × comparison years × 12 (simplified, excluding management fee, rates, price movement, rental yield).
Difference = total buy cost − total rent.
$$\text{RentTotal} = \text{MonthlyRent} \times \text{Years} \times 12$$$$\text{EMI} = L \times \dfrac{r(1+r)^{n}}{(1+r)^{n}-1}, \quad L = \text{Price} \times (1 - \text{DownRatio}),\ r = \dfrac{\text{rate}}{12}$$$$\text{BuyTotal} = \text{DownPayment} + \text{EMI} \times \min(\text{Years}\times 12,\ n)$$How to Use
- Enter the property price, down payment ratio, mortgage rate and term.
- Enter the monthly rent of a comparable unit.
- Set the holding period to compare the two totals instantly.
FAQ
Does this comparison consider property price appreciation?
To keep it simple, this calculator compares cash outlay only (rent versus down payment plus instalments). It does not include price movement, rental yield, management fees, rates/rent, or asset recovery when selling. A real decision should weigh these factors together with your personal risk tolerance.
Besides the down payment, what one-off costs are involved in buying in Hong Kong?
Home purchase also involves Ad Valorem Stamp Duty (AVD), legal fees, agency commission, and mortgage insurance (for high loan-to-value ratios), followed by recurring costs such as management fees, rates/rent and maintenance. This tool compares only the down payment and mortgage instalments; you should budget for these extra costs before comparing rent versus buy.
What is the maximum mortgage LTV for a Hong Kong residential property, and how much down payment is needed?
Under current HKMA measures, for a self-use residential property priced at HK$30 million or below the maximum loan-to-value ratio is 70% (i.e. a 30% down payment); mortgage insurance is required above 70%. A lower down payment means a higher loan and instalments, which also changes the rent-versus-buy result, so you should model with the LTV you can actually obtain.
When is renting more cost-effective than buying?
If you expect a short stay (e.g. 3–5 years), anticipate flat or falling prices, or wish to keep cash liquidity and investment flexibility, renting is usually better because the down payment, stamp duty and transaction costs cannot be spread over a short period. Conversely, long-term owner-occupation with stable income and the ability to absorb rate rises lets you build asset through principal repayment and hedge against rising rent.
What is the formula and data basis of this calculator?
This calculator uses the standard equal-monthly-instalment (annuity) formula for the monthly payment. The loan-to-value cap (maximum 70%) and debt-servicing-ratio arrangements follow the HKMA residential mortgage rules, and rental data can reference the Rating and Valuation Department's private domestic rent index. Results are for estimation and planning only; actual approval and market conditions are subject to the relevant authorities.
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References
Content review: Calculatorism Finance Team. Results are for reference only; please refer to the relevant authorities for the official figures.