How does a rent vs buy comparison work?

It totals every cost of each path over your horizon. Buying includes the deposit, ISABI, mortgage interest, predial and maintenance, offset by the equity and appreciation you keep. Renting totals the rent paid, offset by the investment return on the cash a buyer would have tied up.

What upfront costs does buying in Mexico add?

Beyond the deposit you pay ISABI (acquisition tax, usually 2–4%), notary fees of around 1% and registration. These closing costs can add 4–6% to the purchase, which the tool subtracts from your buying outcome.

Why include an investment return for renters?

A renter keeps the deposit and closing cash a buyer spends. Investing that money earns a return, which lowers the true cost of renting. Ignoring it would unfairly favour buying.

What appreciation rate should I use for Mexico?

Mexican home prices have historically risen broadly in line with or slightly above inflation, but it varies hugely by city and neighbourhood. Use a conservative real rate and test a few values, since appreciation strongly affects the result.

Are my figures sent anywhere?

No. The whole comparison runs in your browser. Nothing you enter is uploaded or stored, so you can model your finances privately.

Mexico Rent vs Buy Calculator

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This Mexico rent vs buy calculator compares the full financial cost of renting against buying a home in Mexico over a horizon you choose, using local mortgage rates, the ISABI transfer tax, predial property tax, maintenance and appreciation. It tells you which option leaves you better off after several years, not just which has the lower monthly payment.

How it works

The tool tallies the net cost of each path over your horizon:

Buying: upfront cash = deposit + ISABI + notary/registration fees. Then it amortises the mortgage to find interest paid and the remaining balance, adds predial and maintenance, and subtracts the equity you walk away with (appreciated value minus selling cost minus remaining loan). Net buy cost = total cash out − equity at end.
Renting: rent rises each year with inflation. The renter invests the deposit and closing cash a buyer would have spent, earning a return. Net rent cost = total rent paid − investment gain on those savings.

Whichever net cost is lower wins. A longer horizon usually favours buying, because upfront costs are spread over more years and equity compounds.

Example

On a MXN 2,000,000 home with 20% down at a 12% rate over 20 years, compared with MXN 12,000/month rent over 10 years, buying often edges ahead once appreciation and equity are counted — but with low appreciation or a short horizon, the high mortgage rate and ISABI can make renting cheaper. Try your own numbers to see the break-even.

Notes

The result is sensitive to the appreciation and investment-return assumptions, so test a range rather than trusting a single run. ISABI rates vary by estado, and the model excludes income tax effects and currency risk. This is an estimate to guide a decision, not financial advice.