The Burrow

Deciding whether to rent or buy a property is a big decision and one that largely depends on your personal circumstances.

But another factor that has a big impact on the choice between renting or buying is where in the world you live, since the monthly cost of rent and home loans can vary considerably between different countries.

We’ve analysed OECD data to find out which countries have the biggest gaps between the average cost of renting and purchasing a three-bed property. Using these figures, we estimated the average monthly rent and mortgage payments around the world, as well as which countries are the most expensive to live in.

Countries where buying is cheaper than renting

Key: Difference between house prices and rent Average rent (US$) Estimated monthly mortgage payment (US$)
1. Finland

-2.1%

$1,285

$1,258

There were just two countries that had a negative house price to rent ratio, meaning that it’s cheaper to buy a house than to rent. The best of these ratios was Finland. However, the difference isn’t a great one, with house prices being just 2.1% cheaper than rent at an estimated monthly average of US$1,285 for rent and US$1,258 for mortgage payments.
2. Italy

-0.9%

$1,006

$997

The only other country where it was cheaper to buy than to rent was Italy and, again, it was only by a very small margin. There was less than US$10 between the average rent and mortgage payment, at US$1,006 for rent and US$997 for mortgages.

Where in the world is it cheaper to buy than it is to rent?

Countries with the biggest gap between house prices and rent

Key: Difference between house prices and rent Average rent (US$) Estimated monthly mortgage payment (US$)
1. Luxembourg

51.1%

$3,017

$4,558

As well as being the most expensive country for both rent and house prices, Luxembourg also had the biggest gap between the two at 51.1%. This means that, with an average rent of US$3,017, the average monthly mortgage payment is estimated at US$4,558. Luxembourg is renowned for its high cost of living, which is clearly reflected in the cost of property and rent.
2. Latvia

42.5%

$582

$830

While house prices in Latvia are much cheaper than those in Luxembourg, it has a similarly high gap between the cost of renting and buying at 42.5%. This means that, with an average monthly rent of US$582, average monthly mortgage payments are estimated at around US$830.
3. Slovakia

42.3%

$771

$1,098

Another European nation completes the top three countries with the biggest gaps between rent and house prices. Slovakia comes in with a 42.3% difference, just behind that of Latvia. House prices have been on the rise in Slovakia over the last few years and with an average rent of US$771, the average monthly mortgage payment is estimated at just over US$1,000.

Where in the world is it cheaper to buy than it is to rent?

The most expensive countries for rent & house prices

Key: Difference between house prices and rent Average rent (US$) Estimated monthly mortgage payment (US$)
1. Luxembourg

$3,017

$4,558

Luxembourg is a very small but rich country, and it had by far the highest average rent and house prices of the countries for which data was available. The country averaged at just over US$3,000 a month for a three-bedroom property and US$4,558 in mortgage payments. With the high costs and the fact that the tiny country shares close borders with France, Germany and Belgium, many choose to commute from cheaper areas in these countries.
2. Switzerland

$2,599

$2,961

Switzerland is another very rich country and is often considered a tax haven, with high rent and property prices too. The average three-bed property can be rented for US$2,599, with monthly mortgage payments average at US$2,961. While these prices and the general cost of living in Switzerland are amongst the highest in the world, the quality of life is also generally considered amongst the best too.
3. Iceland

$2,036

$2,610

Iceland is another very developed country, which is reflected in its high average cost of rent of US$2,036 a month and a monthly mortgage payment of US$2,610. However, like other expensive countries, Iceland has plenty going for it, with relatively low taxes, universal health care and tertiary education, and it also runs almost entirely on renewable energy.

Where in the world is it cheaper to buy than it is to rent?

Rank
Country
Average rent (three bedrooms)
Estimated monthly mortgage payment
Difference between house prices and rent
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Methodology

The research is in US$.

The house price to rent ratio for each country was sourced from OECD and is calculated by dividing the nominal house price index by the housing rent price index from the same source. For example, a ratio of 151.1 means that house prices are 51.1% more expensive than renting.

The average rent for a three-bedroom property in each country was calculated by averaging the average cost of renting a three-bedroom property both in and outside of city centres, according to Numbeo.

Average monthly mortgage payments were then estimated by multiplying the house price to rent ratio by the average rent.

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