This Israel rent vs buy calculator answers a question every mover in Tel Aviv, Jerusalem or Haifa faces: is it smarter to keep renting, or to buy with an Israeli mashkanta (mortgage)? It models the full financial picture — the upfront mas rechisha purchase tax, the mortgage, the annual arnona and maintenance costs, appreciation, and the alternative of investing the money you would have sunk into a home.
How it works
The tool runs two parallel net-worth paths over the years you plan to stay.
Buying. Upfront you pay the deposit plus acquisition costs (mas rechisha purchase tax plus lawyer, broker and registration fees — a percentage you set). The mashkanta amortises monthly at your interest rate; each year you also pay arnona, building maintenance and insurance. At the horizon the home is sold at the compounded appreciation rate, a selling cost is deducted, and the outstanding mortgage is repaid. What remains is your buyer equity.
Renting. The renter starts by investing the deposit and purchase costs they did not spend. Each month, if owning costs more than rent, the difference is also invested at your assumed return; rent itself grows each year. Their final net worth is that invested pot.
The verdict is simply buyer equity − renter net worth: positive means buying wins, negative means renting wins.
Example
Buy a ₪2,200,000 apartment with a ₪550,000 deposit, 3% acquisition costs (primary home, low purchase tax), a 5% mortgage over 25 years, staying 10 years, against ₪6,500 rent. With 3% appreciation and a 5% investment return, the tool shows whether the buyer’s equity at sale beats the renter’s invested savings — and which costs (the purchase tax and fees, the mortgage interest, the arnona) drove the gap.
Notes
This is a simplified model. It ignores mas shevach capital gains on the home sale (a single primary residence is often exempt), tax on the renter’s investment gains, and assumes you sell at the horizon. Remember that mas rechisha is near zero for a single home below the threshold but starts at 8% for an additional property — set the acquisition rate accordingly. Use it to compare scenarios, not as financial advice.