Buying or investing elsewhere: the first-time buyer's calculation

Owning your main home remains the first instinct when it comes to building wealth. Yet before signing on the dotted line, one question deserves to be asked coolly, calculator in hand: what if staying a tenant to invest elsewhere paid off more? The first-time buyer property purchase alternative is not a contrarian slogan, it is a financial trade-off that depends on your profile, your mobility and the real cost of the operation. This article compares the two paths with recent figures, free of dogma, to help you decide with full knowledge of the facts.

The instinct to buy your main home: truly unavoidable?

Buying your main home has been presented for decades as a mandatory step, almost a financial rite of passage into adulthood. The reasoning fits in one often-repeated sentence: paying rent is throwing money out the window, whereas repaying a loan builds wealth.

This reasoning is not wrong, but it is incomplete. It overlooks several realities that every first-time buyer should weigh.

First, buying ties up a considerable share of your financial capacity in a single asset, in a single geographic location. Second, it assumes a level of professional and personal stability over several years that many young working adults simply do not have. Finally, it skips over the entry cost, which can reach 10 percent of the property price once you add transaction taxes, conveyancing fees and ancillary charges.

In 2025 and 2026, the context only reinforces this hesitation. The average mortgage rate stood at 3.22 percent in the first quarter of 2026, with a slight rise observed in the spring, around 3.35 percent over 20 years. The era of historically low rates belongs to the past. To better grasp these mechanics, having mortgage rates explained in five minutes can sharpen your decision.

At the same time, market studies show that buying is once again more profitable than renting in the majority of cities. The profitability of a purchase has even gained more than two years compared with the previous year, according to a leading annual study.

In other words, neither always buy nor never buy holds up against the figures. The right answer depends on your situation. That is precisely what this article will unpack, profile by profile, scenario by scenario. The goal is not to steer you away from buying, but to give you the tools to run your own calculation before committing for twenty or twenty-five years.

What buying your main home really costs

The advertised price of a property never reflects the true cost of the operation. Between signing the preliminary agreement and moving in, then throughout ownership, expenses pile up that the excitement of buying often makes you forget. Understanding these costs is the first step to honestly comparing the two paths.

The hidden costs nobody calculates

Conveyancing and transaction fees are the most visible item, but they are underestimated. On existing properties, they represent on average 7 to 8 percent of the property price. On new builds, they drop to 2 or 3 percent, which makes that option lighter at entry.

On top of this comes a recent unfavourable shift: since 2025, local authorities can raise transfer taxes to as high as 5 percent, up from 4.5 percent previously. A quiet but real increase that weighs on existing properties.

Once you are an owner, the list grows longer. Property tax, non-recoverable building charges, maintenance work, façade renovation, owner's home insurance. All of these ancillary costs can represent up to 10 percent of the total cost of an acquisition over time. Nobody enters them into their initial financing plan, and that is precisely what skews the comparisons. To see this more clearly, this guide on who pays what between landlord and tenant details how these charges are split.

The tied-up deposit and its opportunity cost

Beyond the fees, there is the deposit. To buy, you often mobilise your entire available savings, sometimes more than 30,000 or 50,000 euros, sometimes more.

That money sunk into the walls no longer works elsewhere. This is what economists call the opportunity cost. While your deposit finances part of the property and the transaction fees, it generates no return of its own.

Yet that same capital, invested in a diversified vehicle, can produce an annual yield. As a benchmark, the best-managed property funds posted distribution rates close to 8 percent in 2025, while the market average stayed below 5 percent. Over a ten-year horizon, the lost