Deciding between buying and renting requires more than comparing monthly figures: you must account for initial costs, recurring charges, financing expenses and how property values and inflation evolve over time. A reasoned evaluation begins by fixing the investment horizon (how long you expect to stay), the intended use of the property and job stability, because these influence liquidity needs and the tolerance for long-term commitments. A robust comparison aggregates taxes, bank fees, upkeep and potential capital gains to estimate the total cost and the final wealth created by each option.
Total cost framework
When constructing a side-by-side model, include three categories: upfront charges, borrowing costs and ongoing expenses. For purchases, upfront items are the down payment, notary and registration taxes, and agency commissions; for rentals, short-term costs include security deposits, agency fees and contract registration. Borrowing costs are dominated by interest: a fixed rate gives payment certainty while a variable rate exposes you to future volatility. Finally, recurring ownership costs—condominium fees, ordinary and extraordinary maintenance, local property taxes and mortgage-related bank fees—must be estimated prudently and added to the monthly burden.
Upfront and financing charges
Typical assumptions to model a purchase: an initial down payment often around 20% of the price, notary fees and registration taxes (with a lower first home regime where applicable), plus bank costs such as application and appraisal fees. At mortgage signing an substitute tax usually applies (for example 0.25% for a primary residence and 2% for a second home). On the tax side, many jurisdictions allow partial deductions on mortgage interest (for instance a 19% deduction up to a set cap). Always factor these one-off and financing items into the first-year cash flow when comparing alternatives.
Recurring ownership expenses
Owning implies ongoing outlays that renters do not directly bear: periodic maintenance (a conservative modeling rule is around 1.5% of the property value annually for extraordinary repairs), condominium charges, insurances and modest bank service fees linked to the loan. These costs are often estimated as a monthly addition to the mortgage payment and can materially change the effective monthly cost of ownership. A realistic comparison transforms all annual, one-off and periodic costs into a consistent monthly equivalent so you can compare them with the monthly rent.
Rent side and modeling assumptions
Rent is simpler in the short term but less predictable over decades: typical assumptions must include periodic rent adjustments tied to inflation (for example ISTAT-linked increases), a security deposit equal to several months’ rent and any agency commission at contract start or renewal. Renting avoids mortgage interest and many ownership risks, but you lose exposure to property appreciation and you may pay a higher cumulative amount if rents grow less slowly than alternative returns on capital. The right choice depends on the interplay between expected property appreciation, inflation and the alternative return on the same capital if it were invested elsewhere.
Illustrative numerical example: Milan 70 m²
Using a concrete case helps. For a 70 m² apartment in Milan priced at €280,000 with an 80% mortgage (€224,000) over 30 years at a fixed rate around 3.3–3.4%, the model below was built with conservative assumptions: down payment €56,000, initial fees about €16,660, a monthly mortgage installment of €981 and accessory monthly costs estimated at €362, leading to an effective monthly ownership cost of €1,343. Starting rent is set at €1,260 with annual indexation; over 30 years the cumulative outflows were estimated at €537,768 for the buyer and €567,585 for the renter, with an estimated final patrimony of €325,192 for the buyer versus €292,250 for the renter—an advantage of €62,759 for buying under these assumptions.
Sensitivity, geography and practical recommendation
Outcomes are highly sensitive to the chosen inputs. The example used conservative parameters: annual inflation 1.5%, annual property value growth 0.5% and an alternative capital return of 5%. Small shifts matter: a +0.5% change in the alternative return can swing the result by roughly €50,000 and 0.1% in average inflation alters the final gap by about €10,000. Applying the same framework to other cities yields different advantages: Verona +€84,228, Livorno +€25,132, Rome +€46,336, Latina +€66,707, Caserta +€88,478, Bari +€94,432 and Palermo +€74,805. Because local prices, taxes and rent dynamics vary, the choice is inherently personal and context dependent.
Practical next steps
To obtain a tailored result, consult a qualified advisor who can run a multi-bank comparison and personalize assumptions to your situation. Credipass recommends a free multi-bank evaluation as a starting point; Roberto Anedda, head of market analysis and public relations at Credipass, highlights the value of comparing offers to save on interest and fees. Credipass operates with two decades of experience, 350 offices and over 800 consultants, is registered with OAM (n. M12), holds a rating of legalità and since 2026 is part of DH Group. For direct inquiries you can write to [email protected].
