Rent vs Buy Calculator

About This Rent vs Buy Calculator

This calculator compares the total financial outcome of renting versus buying a home in Japan. It models real estate depreciation, mortgage amortization, property taxes, and investment returns using a constant budget ceiling approach, ensuring both options are compared fairly.

Enter the property price, your down payment, mortgage terms, and expected rent and investment parameters. The calculator shows year-by-year equity, savings, and a final total wealth comparison over your chosen time horizon.

A distinctive feature of this calculator is the constant-budget-ceiling model. Rather than comparing "what if I spend X on rent" against "what if I spend Y on a mortgage" — which stacks the deck toward whichever option is cheaper — it allocates the same total annual housing-plus-savings budget to both paths. The cheaper option invests the surplus. This produces a fair comparison of long-term wealth rather than a misleading snapshot of monthly cash flow.

The calculator exposes every assumption: mortgage rate, down payment, property appreciation, rent inflation, building depreciation schedule, property tax, acquisition and selling costs, and the government mortgage tax credit. Change any of them to match your situation. A central-Tokyo condo, a suburban house, and a rural property can behave completely differently, and the defaults are intentionally conservative averages rather than optimistic projections.

YenWise builds each tool for expats who need numbers they can explain to an employer, a tax accountant, or themselves. We document official sources, show intermediate steps where it matters, and flag every simplification. Use the calculator as a planning layer on top of primary documents (源泉徴収票, ねんきん定期便, brokerage statements), not as a substitute for them.

Who Should Use This Calculator

This tool helps anyone deciding between renting and buying property in Japan:

If you are weighing a specific property, plug its real numbers in — price, structure (wooden or RC), land-value ratio, and the actual mortgage offer from your bank. Generic averages tell you the direction; specific numbers tell you the decision. The calculator is most decisive for horizons of 5 to 15 years; beyond 20 years the result becomes sensitive to assumptions about appreciation and inflation that are inherently uncertain.

If you are comparing job offers, planning a move within Japan, or preparing for year-end tax adjustment (年末調整) or final return (確定申告), run two or three scenarios side by side and save or screenshot the results for your records.

• •Expats and long-term residents weighing the financial trade-offs of homeownership in Japan
• •Couples and families planning their housing strategy for the next 5-30 years
• •Investors evaluating whether residential real estate makes financial sense compared to renting and investing the difference
• •Anyone cross-checking payslips, pension notices, or brokerage statements against official rules

How Rent vs Buy Works in Japan

A fundamental difference between Japan and many Western countries: buildings in Japan depreciate rather than appreciate. Wooden structures (mokuzo) have a 22-year statutory useful life, while reinforced concrete (RC) buildings have 47 years. Only the land retains or increases in value.

Japan's mortgage market offers both fixed-rate (Flat 35, approximately 3.2% in 2026) and variable-rate loans (approximately 0.5%). The government provides a significant mortgage tax credit (jutaku kashikirikin tou tokubetsu kojo): 0.7% of the outstanding loan balance per year, up to 140,000 yen annually for 13 years. Acquisition costs add approximately 7% to the purchase price, and selling costs run about 3%.

This calculator uses a constant budget ceiling model: both renting and buying paths allocate the same total annual budget for housing plus savings. The cheaper option invests the surplus. This ensures a fair comparison where total wealth equals home equity plus liquid investments, rather than comparing unequal spending paths.

The Japanese government mortgage tax credit (jutaku kashikirikin kojo) is one of the most generous in the world: roughly 0.7 percent of the year-end loan balance, up to 140,000 yen per year, for up to 13 years. On a 30-million-yen loan that is over 1.5 million yen in total tax savings. The calculator applies this credit automatically using your loan term and balance, and it materially changes the buy-vs-rent outcome — a fact many casual calculators omit entirely.

After you change an input, results update in the browser only — nothing is uploaded. Shareable URL parameters (where enabled) encode your scenario so you can reopen the same numbers later or send them to a spouse or accountant without creating an account.

Methodology & review

The model uses a constant annual housing budget ceiling so rent and buy paths invest the surplus at your chosen return. Mortgage amortization is monthly; building depreciation is linear over statutory lives (wooden / RC); property tax and mortgage tax-credit assumptions are user-editable with Japan-typical defaults.

Each tool is reviewed when underlying rules change (for example Reiwa-year tax reforms, NISA contribution caps, or pension premium tables) and whenever we expand the long-form explanation. The “Last reviewed” date on the page is the date of the latest substantive content or formula review.

We distinguish three kinds of numbers: (1) exact under the stated statute, (2) statutory estimates with known caps, and (3) planning assumptions you control. Assumptions such as expected investment return or remaining working years are never hidden inside a black box.

• •Primary sources linked in the Sources section below
• •Browser-side calculation — inputs stay on your device
• •Editorial review date shown in the byline above the tool

Important Notes

The calculator uses a simplified linear depreciation model. Actual property values depend on location, building condition, market timing, and reconstruction potential. Properties in central Tokyo may behave very differently from suburban or rural properties.

Rent inflation in Japan is modest, historically around 0.5% per year. Renewal fees (koshin ryo) of approximately one month rent are typically charged every two years. Property tax (kotei shisan zei) is approximately 0.5% of the assessed value after the residential land special exception (jutaku yuchi no tokurei).

Depreciation in Japan is statutory and relentless: wooden buildings are written off over 22 years, reinforced concrete over 47 years, and the building component of a property typically reaches near-zero book value at the end of that period. Only the land retains or gains value. This is why a 30-year-old wooden house often sells for little more than the land underneath it — a fact that surprises buyers from countries where buildings appreciate. The calculator models this correctly; do not assume otherwise when reading results.

Local city-tax nuances, special deductions (medical, housing loan credit details, foreign tax credits), and employer-specific social insurance rates can differ from simplified models. When your situation is complex, take the YenWise breakdown to a zeirishi or FP and adjust inputs using your actual forms.

Thinking Clearly About Housing in Japan

Housing decisions are emotional as well as financial. These principles help separate the two:

• •Decide your planning horizon first — under 5 years almost always favors renting due to acquisition and selling costs alone.
• •Treat the building as a depreciating consumable and the land as the investment; in Japan this distinction is sharper than almost anywhere else.
• •Get a written mortgage offer from at least two lenders before trusting any calculator's rate assumption — actual offered rates vary by 1 percent or more.
• •Factor in renewal fees, key money, and the 2-year lease cycle when projecting rent; they add roughly one month of rent per year on average.
• •If you might leave Japan within 10 years, strongly weight the rent path — selling costs and illiquidity make buying a poor short-term bet.
• •Bookmark the page with your scenario filled in, and re-run after any salary change, bonus, or rule update so your plan stays current.

Official Sources and Further Reading

• Ministry of Land, Infrastructure, Transport and Tourism — Housing Statistics
• Bank of Japan — Current Interest Rates
• Flat 35 — Housing Loan Agency