Buy or Rent Calculator – How Does It Work? 

Post : January 9, 2023

A homeowner's most important question is, 'Should I buy or rent?'. Buying a home is a crucial decision. 

Undoubtedly, this financial move has many advantages, but not without certain risks. A property with fixed costs will generally gain in value over time, but handing over a huge amount of money without knowing the uncertainties is more likely to cause issues. 

This is the exact reason why the Buy or rent calculator is designed. To help potential home buyers to make the best decision that suits them best according to their lifestyle. It will help you comprehend and get a clear view of whether it will be economical and productive for you to buy or rent your property in the long term. 

The buy or rent calculator will evaluate the decision from a financial standpoint. The calculations are based on many assumptions, such as constant rental fee increase rates and home value appreciation rates. 

Unlike other Buy or Rent Calculators, this tool is designed especially for Muslims. It automatically accounts for increases gradually in line with inflation, such as rent increases and repayments. It also factors in stamp duty, buying costs and the return on your invested deposit money in case you choose to rent. 

Step-By-Step Procedure of Buy or Rent Calculator 

Listed below are the 3 steps on how the Buy or Rent Calculator works: 


Once you type in the price of the house, the calculator will instantly factor in the average buying costs and the stamp duty. 

The average buying cost is 1% of the purchase price of a house. Generally, stamp duty is calculated according to government rules. 

Then you can enter the length and the rate of your mortgage. The calculator will work out the amount of money you will be paying over your mortgage term. 

It also factors in the compounding nature of mortgages, the payment you make, inflation, and the average maintenance cost of a house. The tool assumes a link between the value of a property and its maintenance costs. 

Then appears a small result for your first step of buying. It shows how much your house is worth using average growth figures over your term and deducts the expenses such as buying costs, maintenance, and mortgage. This could result in either a positive or a negative figure. 


On the space mentioned rent, you will have to insert the rent value you have to pay for the place you decide to live in.

The calculator then instantly adds an average cost meant for maintenance for the property's value. Just as with buying, the tool assumes a link between the value of the property and the maintenance cost. 

Your annual rental payments will also be calculated and added to the result. The calculator also assumes that your rent is reviewed each year, which factors in the increases in rent over time following inflation. 

If you decide to invest your saved-up deposit instead of buying a house, then you can insert the annual return that you expect to receive. Since most of the simple buy or rent calculators don't have this concept, we believe our calculator is special for a reason. 


In the end, you will be presented with a recommendation in the results section on which results are favourable. In order to make your renting worthwhile, the calculator will suggest how much you need to increase your annual return. 


With the buy or rent calculator, we aim to give the users the best results to decide whether to buy or rent a property. Since these tools cannot predict the future, the results will only be estimates based on your input values. While you are at it, you can also check our home loans to secure your home. 


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