Rent or buy Germany

Would buying actually leave you better off than renting?

Most comparisons treat the renter as somebody who only pays rent. They still have the deposit and the purchase costs, and for years they pay less every month. This runs both households side by side and says which year, if any, the buyer gets ahead.

The house, and the flat you would keep renting

Both households start with the same money. One spends it on a deposit and the purchase costs; the other invests it.

Purchase price€What the seller is asking. Example: the purchase costs on top are €54,315 in this state. Equity€The buyer spends this; the renter invests it. Example: this single assumption is what most rent-versus-buy calculators leave out. Monthly rent today€For a comparable home, cold. Example: at your figures the two households come out level at a rent of €1,704. Interest rate%The Sollzins on the mortgage. Example: it is fixed for the Zinsbindung and unknown after it. Initial repayment rate%Faster repayment costs more each month and less in total. Example: it moves the monthly figure the renter is compared against. Compare overYears. Example: the shorter the stay, the worse buying looks, because the purchase costs never come back.

Financing beyond the fixed rate

Fixed-rate periodyearsThe initial mortgage rate is used only for this contractual period. Refinancing rate after the fixed period%Required for a winner when the comparison lasts beyond the fixed-rate period. It is a scenario, not a forecast.

Purchase costs and the state

Federal stateSets the transfer tax and the usual agent share. Example: those costs are spent on day one and no bank lends against them. Selling costs%Charged on the house at the end. Example: set it to zero if you never intend to sell, and the buyer's side improves.

How rent, upkeep and prices move

Rent rises by%Per year. Example: a rent rising two percent a year has doubled in thirty-five years, which is most of a mortgage term. Maintenance and service charges%Of the price, per year – the costs a tenant does not carry. Example: one to one and a half percent is the usual guidance, and a flat has the Hausgeld on top. Maintenance cost growth%Per year. Keeping repairs nominally flat for decades would overstate the owner result. The house gains%Per year. Example: the assumption that moves the answer most, and the one nobody can know.

What the renter's money earns, and its tax

The invested money gains%Per year, before tax. Example: comparing a house at two percent with a portfolio at six is a bet on both, not a fact about either. Base tax rate on investment income%The default is capital-gains tax plus solidarity surcharge, before any fund exemption and allowance. Fund partial exemption%Thirty percent is the German equity-fund default. The allowance is applied after this exemption. Tax-free allowance at investment sales€

Buying gets ahead in year 12

€102,660 better off after 30 years as an owner

Owning, each month€2,337mortgage plus maintenance, before anything the house asks for unexpectedly

Renting, each month€1,800today, rising every year

The gap invested€537a month at the start – this is what the renter puts away

Rent that makes it a tie€1,704you already pay more than this, so buying wins

Owner after 30 years€786,013the house less what is owed and what selling costs

Renter after 30 years€683,353the portfolio after tax on its gain

Investment tax paid€124,446after the fund exemption and shared allowance ledger

What each household is worth, year by year

BuyingRenting and investing

Years · the marker is where buying overtakes

Both households, year by year

Year	House worth	Still owed	Owner	Renter
1	€459,000	€396,094	€46,520	€111,741
2	€468,180	€387,572	€63,894	€123,503
3	€477,544	€378,738	€81,757	€135,566
4	€487,094	€369,581	€100,124	€147,945
5	€496,836	€360,089	€119,011	€160,654
6	€506,773	€350,249	€138,432	€173,710
7	€516,909	€340,049	€158,406	€187,132
8	€527,247	€329,476	€178,948	€200,937
9	€537,792	€318,516	€200,077	€215,145
10	€548,547	€307,154	€221,810	€229,778
11	€559,518	€296,405	€243,138	€246,603
12	€570,709	€285,162	€265,172	€263,983
13	€582,123	€273,403	€287,938	€281,948
14	€593,765	€261,103	€311,465	€300,528
15	€605,641	€248,239	€335,781	€319,758
16	€617,754	€234,783	€360,917	€339,671
17	€630,109	€220,709	€386,904	€360,304
18	€642,711	€205,989	€413,777	€381,698
19	€655,565	€190,592	€441,569	€403,893
20	€668,676	€174,489	€470,316	€426,934
21	€682,050	€157,645	€500,056	€450,866
22	€695,691	€140,027	€530,827	€475,739
23	€709,605	€121,601	€562,671	€501,631
24	€723,797	€102,327	€595,630	€528,637
25	€738,273	€82,168	€629,748	€556,821
26	€753,038	€61,084	€665,071	€586,246
27	€768,099	€39,030	€701,648	€616,924
28	€783,461	€15,964	€739,528	€648,895
29	€799,130	€0	€770,601	€674,050
30	€815,113	€0	€786,013	€683,353

Over 30 years the owner pays €900,038 to the bank and to the roof, and the renter pays €876,271 in rent. Neither figure is the answer on its own – what matters is what each household owns at the end.

This prices money and nothing else. Ownership can reduce tenancy risk but creates concentration, repair and forced-sale risk. A tenant's notice period is normally three months in Germany, subject to the contract and law; neither choice is captured fully by arithmetic.

Look at the mortgage on its own

What this answers

What the renter does with the deposit

Most comparisons quietly assume it disappears. It does not: the renter keeps it, invests it, and for years pays less every month as well. Whether buying wins depends almost entirely on what that money does, and on how long you stay.

The costs that never come back

Buying starts a long way behind

Transfer tax, the agent, the notary and the land registry are spent on day one and recovered by nobody. On an ordinary purchase they are more than a year of rent, which is why a short stay almost never favours buying.

What it does not answer

What houses and markets will actually do

Two growth rates decide this and neither is knowable. Change them by a point each and the crossing point moves by a decade – which is the honest finding, and the reason this gives a crossing year rather than a verdict.