How we calculate it
If you buy, you pay the deposit and costs on day one, then each month the mortgage payment plus owner costs. Your wealth at the end is what the house is worth (minus the 6% it would cost to sell) less what you still owe the bank.
If you rent, you invest that same initial money. Each month you pay the rent; if that is cheaper than owning, you invest the difference too. If it is the other way round, the buyer invests the difference. That way both options start with exactly the same money, and the comparison is fair.
The chart shows the wealth of each option at the end of every year. The point where the lines cross is the year from which buying pays off.
Buy or rent: what moves the result most
- How many years you stay. Buying and selling costs are paid once. The more years, the more they are spread out. Below five or six years, renting usually wins.
- Price growth. One point up or down changes the outcome a lot, because it applies to the whole house, not just your deposit. Try a cautious scenario.
- The ratio between price and rent. If the annual rent of a similar home is under 4% of its price, renting tends to come out ahead. Above 5%, buying usually wins.
The Canary Islands have their own market
In tourist areas long-term rentals are scarce and rents rise quickly, which tips the balance towards buying if you plan to stay. In inland and mid-altitude municipalities the opposite happens: lower prices and steadier rents. Check the average price per square metre of each area in our directory before setting the figures.
Frequently asked questions
Is it better to buy or rent in 2026?
It depends mainly on how many years you will stay and what rent costs compared with the purchase price in your area. With long stays and high rents, buying usually works out better; with short stays, renting.
Is renting throwing money away?
Not quite. Buying also has money you never get back: interest, purchase taxes, IBI, community fees and upkeep. The calculator counts them all so the comparison is like for like.
What return should I enter for the money invested?
A cautious figure for long-term, diversified money is between 3 and 5% a year. If the money would sit in a savings account, enter what that account pays.