How does the rent vs buy comparison work?

Buying ties up a deposit and acquisition costs, then pays mortgage interest, principal and holding costs while the home appreciates — its net cost is total cash out minus end equity. Renting keeps that cash invested while paying rising rent — its net cost is rent paid minus the investment gain. The lower net cost wins.

Why does buying often win in Nigeria over a long horizon?

High rent inflation and strong nominal property appreciation favour owners, because rent compounds upward while a fixed-rate mortgage does not. But high mortgage rates and large upfront equity push the other way, so the answer is sensitive to your inputs — try a few scenarios.

What acquisition costs should I include?

Budget for stamp duty (1.5% on the conveyance), the governor's consent fee, registration, survey and legal fees, and any agency commission. These often total around 5% or more of the price; the calculator lets you set the percentage.

How does the Nigerian custom of paying rent upfront affect this?

Many Nigerian landlords require one to two years of rent in advance. This model spreads rent evenly month by month, which understates the cash-flow strain of large upfront demands — factor that into your decision even when buying looks costlier on paper.

Is this financial advice?

No. It is a simplified projection based on your assumptions and ignores taxes, selling costs and personal circumstances. Use it to frame the decision, then confirm with a mortgage adviser and your own market data.

Nigeria Rent vs Buy Calculator

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This Nigeria rent vs buy calculator compares the true long-run cost of renting a home against buying one, using local mortgage rates, acquisition costs, holding costs, rent inflation and property appreciation over a horizon you choose.

How it works

The model simulates both paths month by month:

Buying: you pay the deposit and acquisition costs upfront, then each month pay mortgage interest, principal and holding costs while the property grows at your capital-growth rate. The net cost of buying is all cash out (including the deposit) minus the home equity you hold at the end.
Renting: you keep the deposit and acquisition cash invested at your assumed return, and pay rent that rises each year. The net cost of renting is total rent paid minus the investment gain.

Whichever path has the lower net cost over your horizon is the cheaper choice.

Example

On a ₦45,000,000 home with a ₦13,500,000 deposit at 18% versus ₦250,000/month rent, with 8% property growth, 10% rent inflation and a 14% investment return over 10 years, buying and renting can land surprisingly close — small changes in growth or rent inflation flip the result.

Notes

High rent inflation is the single biggest force pushing toward buying in Nigerian cities.
Many landlords demand 1-2 years rent upfront; this monthly model smooths that, so weigh the cash-flow strain separately.
The result ignores capital gains tax and selling costs — treat it as a framing tool, not a final answer.