Buy vs rent: the 3-axis sensitivity grid on a £300k UK home (2026)
Most buy-vs-rent comparisons reduce to a single number — "buying wins by £X" or "renting wins by £Y". That single number is fragile. It hides three assumptions: the mortgage rate at completion, how fast rent rises over the holding period, and how long the borrower's fix locks the rate in. Each assumption moves the answer. None of them is knowable in advance.
This piece holds the same baseline — a £300,000 home, 10% deposit, a £270,000 mortgage on a 25-year term, against a comparable rented home at the most recent UK mean rent — and flexes each of the three assumptions in turn. The point is not to declare a winner. It is to show how much each assumption matters, so a reader can stress-test their own situation against the right axis.
The baseline
- Property price: £300,000
- Deposit: £30,000 (10%)
- Mortgage: £270,000, 25-year capital repayment
- Origination rate: 4.32% (Bank of England 75% LTV 5-year fix series, April 2026 monthly file)
- Starting comparable rent: £1,326/month (Office for National Statistics Price Index of Private Rents, most recent UK mean)
- Horizon: 10 years
At the base rate the monthly capital-repayment payment is £1,473. Over 10 years the borrower pays £176,796 in mortgage payments and is left with approximately £194,925 of principal outstanding (the rest having gone to interest and the modest amount of principal repaid in the early years of a 25-year amortisation). The renter, with rent rising 3% a year, pays £182,413 over the same decade. The base case sits within a few thousand pounds either way — close enough to be statistical noise.
That tight base case is the trap. Move any one of the three axes and the answer moves materially.
Axis 1 — Rate at origination (±2 percentage points)
Hold fix length at 5 years and rent growth at 3% a year. Flex only the rate the borrower locks at completion. Each 1pp on the rate adds roughly £150–£160 a month to the payment on a £270k 25-year repayment loan.
| Rate at origination | Monthly payment | 10-year mortgage paid | 10-year rent paid | Buy − Rent |
|---|---|---|---|---|
| 2.32% | £1,187 | £142,432 | £182,413 | −£39,981 |
| 4.32% (base) | £1,473 | £176,796 | £182,413 | −£5,618 |
| 6.32% | £1,793 | £215,137 | £182,413 | +£32,724 |
Over a ±2pp band the buy-side decade total moves by £72,705 — almost a quarter of the original purchase price. The rent column is unchanged because rent growth has been held flat across this row.
The published rate stress test piece walks through what happens when the rate moves not at origination but at remortgage — a different shock with a similar shape.
Axis 2 — Rent growth (1% / 3% / 5% a year)
Hold the rate at 4.32% and the fix at 5 years. Flex only the rent growth assumption. The renter's 10-year cash out is the geometric sum of the monthly rent compounding at the chosen rate.
| Rent growth | Year-10 rent | 10-year rent paid | 10-year mortgage paid | Buy − Rent |
|---|---|---|---|---|
| +1%/yr | £1,465/mo | £166,475 | £176,796 | +£10,321 |
| +3%/yr (base) | £1,782/mo | £182,413 | £176,796 | −£5,618 |
| +5%/yr | £2,160/mo | £200,139 | £176,796 | −£23,344 |
Across the 1%–5% range the rent-side decade total moves by £33,665. That is meaningful, but it is roughly half the variance of the rate axis. Long-run UK rent growth has been broadly in the middle of this range — see ONS's PIPR series — but back-tested years vary widely and the past is not a forecast.
The published rent inflation piece sits in the same axis with a deeper look at the compounding mechanics.
Axis 3 — Fix length (2yr / 5yr / 10yr) under a +1pp rate shock at remortgage
The fix-length axis only matters once rates move. Hold the origination rate at 4.32%, hold rent growth at 3%, and apply a +1pp shock to the remortgage rate (so any remortgage inside the decade rolls onto 5.32%, not 4.32%). The 2-year fix remortgages four times in the decade, the 5-year fix remortgages once, the 10-year fix not at all.
| Fix length | Remortgages in decade | 10-year mortgage paid | 10-year rent paid | Buy − Rent |
|---|---|---|---|---|
| 2 years | 4 | £190,776 | £182,413 | +£8,362 |
| 5 years | 1 | £184,569 | £182,413 | +£2,156 |
| 10 years | 0 | £176,796 | £182,413 | −£5,618 |
Across the three fix lengths the buy-side decade total moves by £13,980. The 10-year fix is essentially an insurance product: it pays a known premium upfront in exchange for being immune to a rate shock that may or may not arrive. Whether the premium is worth it depends entirely on whether the shock actually shows up.
The published fix-length piece covers the lender-by-lender variation in how the 2-year vs 5-year premium prices the rate optionality.
What the three axes look like side by side
| Axis | Range tested | Buy-side variance (low → high) |
|---|---|---|
| Rate at origination | 2.32% → 6.32% | £72,705 |
| Rent growth | 1% → 5% per year | £33,665 (rent side) |
| Fix length | 10yr → 2yr under +1pp shock | £13,980 |
The rate axis is the largest single mover, contrary to what would be intuitive (the rent escalator compounds for 10 years, after all). The reason: a 2pp swing on £270k of principal flows directly into the monthly payment from day one, while rent growth compounds from a low base and only reaches its full impact in the back half of the decade. Fix length is the smallest mover of the three — but only because we have assumed a single, modest +1pp shock at the one remortgage event. Larger shocks, or shocks that arrive at every 2-year roll, would widen this column considerably.
A separate exercise — the remortgage rate shock piece — looks at this directly on a £200k loan, and confirms the same shape: the larger the shock, the more the fix-length insurance value grows.
Reading the grid honestly
Three observations follow from the grid, none of them a recommendation.
First, the central case is too close to call. At base assumptions the buyer is within £6,000 of the renter over a decade on a £300k purchase. That gap is smaller than one year's worth of typical transaction friction — stamp duty, survey, legal, search, broker fees — and well inside the noise band of any sensible model. If a published article or calculator says "buying wins by £5,000 over 10 years", read that as "the model says zero".
Second, the rate axis is the load-bearing assumption. It is also the assumption the buyer has the most control over: they can choose to wait, to put down more deposit and qualify for a different LTV band, or to take a fix length that defers the rate question to a later date. The other two axes — what rent does, when remortgage rates move — are exogenous.
Third, the fix-length premium is a known cost paid against an unknown saving. A 10-year fix at today's published prices costs the borrower a modest amount of headline rate relative to a 5-year. That premium is real and visible. The insurance it buys is only valuable if rates actually rise at the remortgage horizon. If they fall or stay flat, the premium was wasted.
Try the numbers yourself
The Homecost mortgage comparison calculator lets you re-run the rate axis with your own deposit, term and rate. The buy-vs-rent calculator flexes rent growth and horizon directly. For a representative £300k Manchester worked example, the M1 1AE postcode page shows the per-property True Cost numbers for the actual housing stock at that price point.
Other pieces in the same cluster:
- True cost of buying a £300,000 home in the UK in 2026 — the upfront and year-one cost stack
- Buying vs renting in the UK in 2026: when does the maths flip? — the broader pillar piece
- Equity built vs rent paid — the principal-recovery side of the same equation
- More Cost Intelligence guides — full category index
Data anchored on the Bank of England 75% LTV 5-year fix series (most recent print 4.32%, April 2026), the ONS Price Index of Private Rents (most recent UK mean), and Homecost amortisation maths against a £270,000 capital-repayment loan on a 25-year term. Land Registry pp-complete provides the underlying transaction context (30.98M residential sales since 1995) for the £300,000 price-point selection.
This is general information based on published data, not financial advice. Mortgage products, fix-length premiums and rent dynamics vary materially by lender, region and borrower profile. Speak to a qualified mortgage adviser before acting on any of the scenarios above.