Buy vs Rent Calculator
The usual comparison — monthly rent against a mortgage payment — is not a comparison at all. Loan principal is not a cost, and a jeonse deposit is not free because you get it back. This calculator charges thesame opportunity cost to equity tied up in a purchase and to equity tied up in a deposit, then finds the first year at which owning becomes the cheaper use of that capital.
If you buy
Mortgage: ₩400,000,000. Principal repayment is not a cost — it becomes equity, and the sale figure below picks it up.
Acquisition tax, surtaxes, agent, scrivener, bond loss.
Owner-side only, not the whole management bill.
Agent, plus any capital gains tax you expect to owe.
If you rent
Own equity in the deposit: ₩500,000,000
Applied to tied-up equity on both sides, and used as the discount rate. This single figure decides most comparisons.
Break-even holding period
- Cost of buying, held 5 years
- ₩84,494,518
- Cost of renting, 5 years
- ₩89,036,447
- Cost of buying, held 10 years
- ₩135,818,664
- Cost of renting, 10 years
- ₩162,217,916
Both figures are total economic cost in today's money, so the smaller number wins. The comparison is deliberately symmetrical: equity locked into a purchase and equity locked into a deposit are both charged the return they are not earning. Loan principal is not a cost on either side — it is recovered through the sale. Everything here follows from two assumptions, g and r; change them before trusting any result.