This Portugal rent vs buy calculator models the real financial trade-off of renting versus buying the same home over the horizon you choose. The buy path carries Portugal’s true entry costs — IMT transfer tax, 0.8% stamp duty, and your deposit — while the rent path keeps that cash invested. It then compares the net cost of each so you can see which comes out ahead.
How it works
The buy path pays IMT, stamp duty, and the deposit upfront, then each month pays mortgage interest, principal, and holding costs (maintenance, IMI property tax, insurance, condominium) while the home appreciates at your growth rate. End wealth is home value − remaining loan. Net cost of buying is total cash out minus the equity you recover.
The rent path keeps the money the buyer would have spent (deposit + taxes) invested at your investment-return rate, and pays rent that rises each year by your rent-inflation assumption. End wealth is the investment portfolio; net cost is rent paid minus the investment gain.
Whichever path has the lower net cost wins.
Example
On a €300,000 home with a €60,000 deposit at 4% over a 10-year horizon, with €1,100 monthly rent, 3% property growth, and a 6% investment return, the renter’s invested deposit can outperform modest property appreciation — so renting may edge ahead. Push property growth to 5% or extend the horizon and buying typically takes the lead as the upfront IMT is spread thinner.
Notes
This is a simplified model. It ignores capital gains tax on a future sale, selling costs (agent fees), the mortgage stamp duty on the loan, and your personal tax position. The result is directional, not advice — small changes in growth and return assumptions can flip the answer, so test a range.