Buy a home or invest in ETFs? The 2026 maths

"Rent is money down the drain" – anyone thinking about buying hears it. The other side says: "An ETF savings plan makes you richer, with no loan and no leaking roof." In 2026 it's worth doing the maths: rates have risen, purchase prices barely, rents noticeably, and stock markets have had a strong decade.

The fair comparison

The question isn't "house or ETF" but:

• Buying: you put in your savings, pay the loan, maintenance and running costs – and at the end you own a (hopefully) more valuable property.
• Renting and investing: you put the same savings into a broadly diversified equity ETF and pay rent. Every month in which owning costs more than renting, you invest the difference as well.

So what's compared is two equally disciplined households with the same money. That's exactly how HausKlaar's rent-or-buy calculator works – with purchase costs, tax on ETF gains and selling costs at the end.

The calculation

A flat in Berlin for €400,000, €100,000 in savings, 3.9% interest fixed for ten years, then 4.5%. A comparable flat to rent costs €1,300 a month without heating. Assumptions over 25 years: the property gains 2% a year in value, rent rises 2.5% a year, the ETF returns 6% before tax.

Result: after 25 years the renter is ahead by about €190,000. The reason is the ratio of price to rent: €400,000 is 25.6 times the annual rent. With rates around 4%, living in your own home then costs more than renting – and the money saved works for the renter on the stock market.

Now the same flat, but with rent at €1,600:

Now the buyer is ahead, by about €40,000; they overtake the renter from year 17.

What tips the result

1. The price-to-rent ratio. The single most important number. At about 20 times the annual rent or less, the numbers favour buying; from about 25 times, they lean towards renting. In sought-after parts of big cities the ratio is often higher.

2. Price growth. In the €1,300 example it changes everything: at 1% a year the renter is ahead by over €330,000; at 3% the gap shrinks to about €15,000. Nobody knows how prices will develop over 25 years. Right now they're barely rising in euros and falling slightly after inflation – more in house prices in 2026.

3. The ETF's return. Broad world equity indices such as the MSCI World have returned around 7% a year on average over decades, considerably more over the past ten years. At 5% instead of 6%, the renter's lead in the first example shrinks to just over €60,000; at 7% it grows to almost €350,000. Shares swing hard; a 30% loss in a single year is possible.

4. The interest rate. If the loan cost 3.0% instead of 3.9%, the renter would only be about €107,000 ahead.

What the table doesn't show

For buying:

• Forced saving. The calculation assumes the renter really invests the difference every month – for 25 years, including through a crash. Many don't. A loan payment, by contrast, has to be paid.
• Security. No notice for the landlord's personal use, no rent increases, rent-free living in old age.
• Tax. The gain on selling a home you live in is tax-free in Germany. ETF gains are taxed: for equity ETFs, after the 30% partial exemption, effectively just over 18% of the gain above the €1,000 annual allowance.
• Freedom. Rebuild, paint, plant a garden without asking.

For renting and investing:

• Diversification. An ETF spreads your money over more than a thousand companies worldwide. A home is one property in one city.
• Flexibility. You can sell part of an ETF in a day. Selling a home takes months, and buying plus selling together often eat up more than 10% of the price.
• No leverage risk. A loan magnifies gains, but also losses. If a home loses value, the loan stays the same.
• No big repair bills. A new roof or heating system doesn't hit the renter.

The verdict for 2026

Purely financially, 2026 is a closer call than the low-rate years. At rates around 4%, buying wins mainly where prices are moderate relative to rents – roughly 20 times the annual rent or less – and for people who otherwise wouldn't save consistently. In expensive areas with high price-to-rent ratios, the disciplined renter with an ETF savings plan often comes out ahead on paper.

In the end, though, the deciding question is often not the return but: where and how do you want to live? Work out your own case – with your rent, your price and your assumptions: Rent or buy?

All calculations are models with fixed assumptions, not investment advice. Past returns say nothing about future ones.