Guide
How does the Rent vs Buy calculator work?
The calculator estimates the true monthly cost of owning versus renting a home in the Netherlands, including upfront fees, running costs, and a five-year projection. Here is exactly what each input means and how the maths works.
Your inputs explained
House price
The asking or agreed purchase price of the property. All cost calculations — transfer tax, mortgage principal, and maintenance estimates — are derived from this figure.
Monthly rent
What you currently pay, or would pay, to rent a comparable property. This is the number the calculator compares against the total monthly cost of ownership.
Down payment (%)
The share of the purchase price you pay from your own savings. In the Netherlands, lenders can finance up to 100% of the market value (loan-to-value ratio), but not the purchase costs — those must come from your own pocket. Most buyers also put in a voluntary down payment to reduce monthly costs and qualify for a better interest rate.
Mortgage interest rate (%)
The annual interest rate on your mortgage, expressed as a percentage. This corresponds to your chosen fixed-rate period — for example, a 10-year fixed rate. As of 2025, 10-year fixed rates in the Netherlands typically range from around 3.5% to 4.5%, depending on your LTV ratio and whether you have NHG (Nationale Hypotheek Garantie).
Mortgage term (years)
The total duration of the mortgage. The standard in the Netherlands is 30 years for an annuity (annuïteit) mortgage, which means you pay the same amount each month throughout the term, with the split between interest and principal shifting over time.
VvE monthly costs
If you are buying an apartment, you will belong to a Vereniging van Eigenaren — the homeowners association. Monthly VvE service charges cover shared building maintenance, insurance for the building structure, and a reserve fund. Costs vary widely: a small apartment block might charge €100/month, a larger complex with facilities can charge €400 or more.
Maintenance
A standard rule of thumb in the Dutch market is to budget 1% of the house value per year for maintenance and repairs (roof, boiler, paintwork, and so on). For a €350,000 property that is roughly €3,500/year or €292/month. This cost is often invisible because you only pay it when something breaks, but it is very real over time.
Home insurance & property tax
Opstalverzekering (buildings insurance) is required by mortgage lenders and typically costs €400–€700/year depending on rebuild value. Onroerendezaakbelasting (OZB) is a municipal property tax charged annually by your gemeente, based on the WOZ value of your home.
Purchase fees
One-time transaction costs: notary fees (for the transport deed and mortgage deed), a valuation report (taxatierapport), and mortgage advice fees. See the Advanced settings to toggle transfer tax separately.
The mortgage calculation
The calculator uses the standard annuity formula used by Dutch lenders:
Principal (P) = house price × (1 − down payment%)
Monthly rate (r) = annual rate ÷ 12
Payments (n) = term in years × 12
Monthly payment = P × (r) ÷ [1 − (1 + r)^(−n)]
This formula produces a fixed monthly payment that covers both the interest charge on the outstanding balance and a portion of principal repayment. In the early years of a Dutch annuity mortgage, most of the payment is interest; towards the end, most of it is principal. The total payment stays the same throughout the fixed-rate period.
Comparing buying and renting
The total monthly cost of ownership is calculated as:
Owner monthly = mortgage + VvE + maintenance/12
+ insurance/12 + OZB/12
+ (purchase fees + transfer tax) / 12
The purchase fees and transfer tax are amortised over 12 months in the monthly comparison so you can see the total effective cost side-by-side with rent.
The monthly delta is simply: buy monthly − rent monthly. A positive number means buying costs more per month right now. A negative number means buying is cheaper per month.
The payback period calculates how many months it takes for the cumulative savings from lower monthly costs (if buying is cheaper) to offset the upfront investment:
Payback = (down payment + fees + transfer tax)
÷ (rent monthly − buy monthly)
If buying costs more per month than renting (which is common in expensive Dutch cities), the payback period does not apply on a monthly cash-flow basis — but the five-year projection below captures the full picture.
Transfer tax (overdrachtsbelasting) is 2% of the purchase price for most buyers. First-time buyers under 35 purchasing a home below €525,000 (2025 threshold) are exempt under the startersvrijstelling.
The 5-year projection
The calculator projects five years forward using two conservative assumptions common in Dutch financial planning:
- Rent inflation: 2% per year. Free-market rents in the Netherlands have historically risen with general inflation, meaning your rent payment increases each year you stay.
- House price appreciation: 4% per year. Dutch house prices have historically grown faster than inflation over the long run, though this varies significantly by period and location.
The projection compares cumulative rent paid versus cumulative ownership costs (including the upfront investment), and shows the estimated property value at year five. This gives you a rough sense of the long-term financial outcome — though real-world results will differ.
What the calculator does not include
A few factors that affect the real financial picture but are outside the scope of this tool:
- Hypotheekrenteaftrek (mortgage interest tax deduction): Dutch homeowners can deduct mortgage interest from their taxable income. This reduces the effective cost of your mortgage, and the benefit depends on your income tax bracket.
- Opportunity cost of the down payment: cash you put into a down payment could alternatively be invested. A proper comparison should factor in what that capital might earn.
- Selling costs: when you eventually sell, you will pay an estate agent (typically 1–1.5% of the sale price) and notary fees again.
- Eigenwoningforfait (notional rental value): a small tax on the deemed rental value of your home, added to your taxable income each year.
Ready to see the numbers for your situation?
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