Rent vs Buy in 2026, Honestly: The Worked Breakeven

Rent-versus-buy arguments in Singapore usually collapse into a slogan. Buyers say rent is dead money. Renters say the down payment could compound. Both are describing half a sum, and the half each leaves out is the half that decides it.

So here is the whole sum, on one property, over ten years, with every figure computed rather than estimated. The conclusion is not the interesting part. The bar you have to clear is.

The setup

A S$1,600,000 resale condominium, 99-year lease, bought by a Singapore Citizen couple as their first property. The alternative is renting the same unit.

The rent is set at a 3.0% gross yield — S$4,000 a month. That is a stated assumption, but not a free one: it sits inside the 2.8–3.4% range currently quoted for resale condos, and it is consistent with what URA's own indices show. Since 2009-Q1 the price index has risen from 100 to 219.4 while the rental index reached 162.5 in 2Q2026. Prices are up 119%; rents are up 63%. Yields did not compress because landlords got greedy — they compressed because the denominator ran away.

That last line does the heavy lifting, so it is stated openly. The renter's "invest the difference" argument assumes the difference is investable. For a Singapore first-home buyer, most of it is not: S$250,000 of the equity is CPF Ordinary Account money earning a guaranteed 2.5%, which cannot be moved into a global index fund. Blending 2.5% on the CPF portion with 4.5% on the cash gives 3.25%. Every cash flow on both sides is carried forward to year ten at that rate, so the two paths are compared on identical terms.

What buying costs

Upfront: S$453,100. That is S$400,000 of equity, S$49,600 of Buyer's Stamp Duty (computed on the marginal 1%–6% tiers, not a flat rate), and about S$3,500 in legal and valuation fees.

Monthly, year one: S$5,997. A S$1,200,000 loan at 2.50% over 25 years is S$5,383 a month, plus S$380 maintenance, S$133 of property tax and S$100 of insurance.

Against a S$4,000 rent, buying costs roughly S$2,000 a month more in cash. But S$35,000 of the first year's S$64,600 of mortgage payments is principal — money moving from one pocket to another, not money spent. The genuinely consumed portion in year one is S$29,601 of interest, which is less than the S$48,000 of rent.

What renting costs

Ten years of rent starting at S$4,000 and escalating 2.5% a year totals S$537,762 in nominal terms, ending at S$4,995 a month. Add lease stamp duty at 0.4% of the rent on each contract, and a moving cost every three years.

At S$4,000 a month the tenant pays no agent commission — that convention applies below S$3,500 — so this comparison gives the renter the benefit of it.

The breakeven

Carrying every cash flow forward at 3.25% and netting the buyer's sale proceeds against the outstanding loan and a 2.18% agent-plus-GST exit, the two paths break even at this rate of annual price growth:

At 2026 rates, buying wins if prices merely fail to fall. For context, the private price index has compounded at 2.78% a year since its 2013 peak and 4.59% a year over the past decade. At 3.0% growth, buying ends ten years ahead by S$450,360; at zero growth it ends S$87,910 behind.

The reason the bar is so low is simply that the cost of money has fallen below the cost of shelter. A 2.5% mortgage against a 3.0% gross yield means the interest on a 75% loan costs less than the rent on the same roof. When that inverts — and it did, at 4%-plus in 2023 — the arithmetic inverts with it.

The costs buyers leave out

• Stamp duty is not a rounding error. S$49,600 is 3.1% of the price and it buys nothing. It has to be earned back before the first dollar of gain is real.
• The exit costs 2.18%. On a sale at S$2,150,266, agent commission plus GST is S$46,876, before legal fees.
• Seller's Stamp Duty runs four years from the date the option is exercised. This is a ten-year model precisely because a shorter hold is not freely available.
• CPF accrued interest. The S$250,000 of CPF used does not sit still. Over ten years at 2.5% it accrues S$70,021 that must be returned to your CPF account from the sale proceeds — not a loss, but not spendable cash either.

The costs renters leave out

• Rent escalates and the mortgage does not. At 2.5% a year, the S$4,000 rent is S$4,995 by year ten. The principal-and-interest payment on a fixed-rate loan is the same number in year ten as in year one.
• You are already paying the landlord's property tax. Owner-occupied property tax on an annual value of S$48,000 is S$1,600 a year. The same unit rented out is taxed as non-owner-occupied at S$7,440 — a gap of S$5,840 a year, or S$487 a month, embedded in what you pay (IRAS rates via data.gov.sg).
• "Invest the difference" is mostly unavailable. Two-thirds of the equity in this case is CPF money at 2.5%. If you assume the renter earns 7% on the whole S$453,100, the breakeven rises to 2.31% and the ten-year gap narrows to S$136,582 — buying still wins, but the argument becomes a real argument. If you assume they earn CPF's 2.5%, the breakeven falls to 0.23%.

Where this actually breaks

Not at the breakeven. At the front door.

The number that decides this for most households is S$453,100 in cash and CPF on completion day, plus the four-year Seller's Stamp Duty lock. If producing that sum would leave you without six months of expenses in reserve, or if your job or family situation might move you within four years, the ten-year arithmetic is irrelevant — you are being asked to win a bet you cannot afford to hold.

Renting in 2026 is not a mistake. Renting because rent is cheaper than a mortgage payment is, because that comparison counts principal as a cost and ignores every fixed charge already sitting inside your rent. And buying because "rent is dead money" is equally lazy: at zero price growth, this purchase loses S$87,910.

Run your own version with your own numbers. The resale condo purchase planner will do the loan, duty and cash-flow side; the growth assumption is the one nobody can compute for you.

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Every figure above is computed, not estimated: Buyer's Stamp Duty on IRAS's marginal residential tiers, property tax on IRAS's 2025 owner-occupied and 2024 non-owner-occupied bands, amortisation on a 25-year loan, and all cash flows carried to year ten at a 3.25% blended opportunity cost. Rent, maintenance, escalation and holding period are stated assumptions and are the right things to change first.