Spain Buy vs. Rent a Home Simulator
Spain · HousingCompare buying a home with a mortgage in Spain against renting an equivalent one and investing the difference — the down payment, the purchase costs, and whatever you save each month if renting is cheaper than the mortgage payment. Instead of comparing only "how much you pay," it compares how much net worth you end up with in each scenario, which is the question that actually matters.
How is it calculated?
Buying: the mortgage payment is calculated with the standard French amortization formula. After the comparison years, your net worth is the home's value minus the capital you still owe (assuming the home's price doesn't change — see limitations). Renting: from day one you invest what you would have spent on the down payment and purchase costs, and every month you also invest the difference between what buying would cost you (payment + community fees + property tax) and what you pay in rent, if renting is cheaper. Your net worth is the final value of that investment. The difference between both net worth figures is the result.
Examples
250,000 home, 50,000 down payment, mortgage at 3% for 25 years, equivalent rent 900/month, investment at 5%, compared over 10 years
Buying: 112,663.21 in net worth. Renting and investing: 152,796.24. In this case, renting comes out 40,133.03 ahead.
180,000 home, 36,000 down payment, mortgage at 3.5% for 30 years, equivalent rent 750/month, investment at 6%, compared over 15 years
Buying: 89,548.17 in net worth. Renting and investing: 137,541.30. Renting comes out 47,993.13 ahead.
What the simulator compares and what it doesn't include
It doesn't include home appreciation or taxes on investment gains. Before comparing, calculate the savings you need with the money needed to buy a home calculator and the payment with the mortgage calculator.
| Scenario | How final net worth is calculated |
|---|---|
| Buying | Home value minus the outstanding mortgage balance (with a constant price) |
| Renting | What it would be worth to invest the down payment, purchase costs, and the monthly difference versus buying |