Rent vs Buy Calculator
Compare the long-term cost of renting versus buying property in Nigeria, factoring in mortgage rates, rent increases, and property appreciation.
Rent vs Buy Inputs
₦
₦
%
%
yrs
%
%
Renting
Monthly Rent (current)
₦300,000
Total Rent over 20 yrs
₦206,189,998
No equity built
₦0
Buying — Lower Net Cost
Down Payment
₦10,000,000
Monthly Mortgage
₦742,824
Future Home Value
₦132,664,885
Buying Saves
₦17,912,244
Total Rent Cost
₦206,189,998
Total Buy Cost (mortgage + down payment)
₦188,277,754
Future Home Value
₦132,664,885
How to Use This Calculator
Enter your current monthly rent, the home price you're considering buying, down payment %, mortgage rate, and comparison period in years. Also enter your expected annual rent increase and property appreciation rate. The calculator compares total costs over the full period including future home value.
What the Calculator Considers
- Renting: Cumulative rent paid over N years, growing annually at the rent increase rate. No equity built.
- Buying: Down payment upfront + total mortgage payments over the period. Future property value (appreciation) offsets the buy cost.
- Net comparison: Total rent outlay vs total buy outlay minus the future property value, showing which option costs less overall.
This is a simplified comparison. Real costs also include: maintenance (1–2% of home value/year), property insurance, land use charge/property tax, mortgage origination fees (1–2%), and for renters — investment returns on money not tied up as down payment.
Example
Lagos Professional — ₦300K Rent vs ₦50M Home Purchase
Monthly Rent₦300,000
Home Price₦50,000,000
Down Payment (20%)₦10,000,000
Mortgage Rate22% p.a.
Monthly Mortgage≈ ₦747,000
Total Rent (20 yrs, 10% increase/yr)≈ ₦206M
Future Home Value (5% appreciation)≈ ₦132M
At Nigeria's high mortgage rates (22%+), buying is very expensive in the short term. However, with 10% annual rent increases, renting becomes more expensive over 15–20 years. The break-even point where buying becomes cheaper depends heavily on appreciation and rent increase assumptions.
FAQ
In Nigeria's current high-rate environment (mortgage rates 20–24%), buying is expensive on a monthly cash flow basis. However, with rents increasing 20–30% annually in Lagos and Abuja, long-term renters face significant cost escalation. The decision depends on: (1) your time horizon — buy if you plan to stay 10+ years, (2) your ability to raise a 20–30% down payment, (3) the specific property's appreciation potential, and (4) whether your income can support mortgage payments that may be 2–3× current rent.
Most Nigerian commercial banks require 20–30% down payment for residential mortgages. Federal Mortgage Bank of Nigeria (FMBN) offers lower down payment options (10% for NHF contributors). Some state housing schemes offer even lower requirements. The bigger the down payment, the lower your monthly mortgage and total interest. With ₦50M property at 20% down = ₦10M upfront, at 25% = ₦12.5M. Build your down payment in a high-yield savings instrument like Treasury Bills while house-hunting.
The National Housing Fund (NHF) is a contributory scheme where employees contribute 2.5% of basic salary monthly. NHF contributors can access FMBN mortgage loans at 6% interest per annum — dramatically lower than commercial rates of 20–24%. Maximum loan amount is ₦15M (as of 2024), being reviewed upward. This is the most affordable mortgage product in Nigeria. Eligibility: 6 months NHF contributions, valid NIN, CAC registration for self-employed. Apply through any FMBN-approved primary mortgage institution.