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Why buying could be cheaper than renting

Natalie Wilson

Nov 7, 2025

Lloyds reveals first-time buyers could save up to 17% per month.

Getting onto the property ladder has long been seen as a challenge, but new research from Lloyds Bank shows that, in many parts of the UK, owning your first home could actually be cheaper than renting.

The study compared average rental costs with typical first-time buyer mortgage payments across 11 major cities; and in nine of them, monthly mortgage payments worked out lower than rent.

Across Great Britain, the average first-time buyer home now costs £228,233. Based on a 5% deposit and a 30-year mortgage at an average fixed rate of 4.78%, that would mean a monthly repayment of £1,135.

In comparison, the average rent for the same type of property is £1,360 per month, meaning that buying could save £225 every month (or £2,700 per year).

Where buying wins over renting

In cities such as Glasgow, Newcastle and Edinburgh, the savings are even more striking.

Glasgow: Buyers could save up to £396 per month, or £4,752 a year.
Newcastle: Monthly savings of £217, adding up to £2,604 per year.
Nottingham and Leeds also perform well, with savings of around £59–£86 per month.

Even in areas where renting remains slightly cheaper, such as Cardiff and Sheffield, the long-term financial advantages of homeownership can still outweigh short-term costs.

Building equity and stability

Beyond the monthly savings, owning your home offers long-term financial security.

Lloyds found that over five years, a buyer putting down a 5% deposit could reduce their loan-to-value ratio from 95% to 87%, even if house prices stay the same. That means building more equity, reducing the risk of negative equity, and unlocking access to better mortgage deals in the future.

In fact, when factoring in both equity growth and lower monthly payments, first-time buyers could be over £32,000 better off after five years, or £20,500 after deposit costs.

Turning rent into your first home

With rents rising sharply in recent years, many people are already paying more each month in rent than they would on a mortgage. That’s why low-deposit mortgages are becoming an increasingly important solution, helping first-time buyers move from renting to owning sooner than they thought possible.

Of course, there are other upfront costs to consider, such as legal fees and moving expenses, but for many, the long-term financial benefits and stability of owning a home far outweigh the short-term costs. Speak to our team about how we might be able to help you with those upfront costs.