House vs shares: which builds more wealth?

A home is bought mostly with borrowed money, so its gains and falls are magnified, and it costs interest, stamp duty, upkeep and selling fees while saving you rent. Shares carry no mortgage but can be taxed outside an ISA. Put the same money into each, set the growth rates, and see which comes out ahead.

A general comparison of two ways to hold money, not a recommendation to buy a home or any investment. Growth rates are scenarios, not forecasts. Homes and investments can fall as well as rise, you may get back less than you put in, and past performance is not a guide to the future. CoreFi does not advise on or arrange mortgages.

After 25 years · The home ahead by

£386,366

The home £681,521 · Shares £295,155

Home side: home less mortgage and selling costs
Shares side: investments

House prices rise, a year%

A scenario, not a forecast.

Investments return, a year%

After fees. A scenario, not a forecast.

After 25 years, at other house price growth

Shares aheadThe home ahead

0%£118,065
1%£185,737
2%£273,410
3%£386,366
4%£531,185
5%£716,040
6%£951,062

Level at house price growth of −2.9% a year, with rents, returns and costs as set.

A move in prices, and what it does to your stake

With £60,000 down on £300,000, on the day, before any payment.

−20%Home−100%Shares−20%
−10%Home−50%Shares−10%
+10%Home+50%Shares+10%
+20%Home+100%Shares+20%

Paid up frontDeposit, stamp duty and buying costs. The other side invests the same.: £62,500
Stamp dutyEngland or Northern Ireland, first-time buyer relief where it applies; the rules in force on 26 Sep 2026.: £0
Mortgage payment: £1,334 a month
Owning, all in, first monthMortgage, upkeep, insurance and service charge.: £1,617
Rent, first month: £1,250
Mortgage interest over 25 years: £160,199
Rent over 25 years: £546,889
Tax on the sharesHeld in an ISA, so not taxed. A main home is normally free of capital gains tax.: None

The home

Home price£

Deposit£

Mortgage rate%

Mortgage term (years)

Where you are buying

First-time buyer

Rent and time

Count the rent a home saves

Rent for a similar home, a month£

Rents rise, a year%

Years to compare

The shares

Shares held

Of which dividends, a year%

The part of the return paid out as dividends, which can be taxed outside an ISA.

Costs of owning

Upkeep, % of value a year%

Buildings insurance, a year£

Service charge and ground rent, a year£

Those costs rise, a year%

Buying costs (legal, survey, fees)£

Selling costs, % of the price%

Growth rates are scenarios you choose, not forecasts. Homes and investments can fall as well as rise, and past performance is not a guide to the future. Not advice or a recommendation. CoreFi does not advise on or arrange mortgages. Reviewed September 2026.

Worked example, illustrative only

A £300,000 home bought with a £60,000 deposit at 4.5%, rising 3% a year and saving £1,250 a month of rent, against the same money in shares returning 5% a year in an ISA: after 25 years the home side has £681,521 and the shares side £295,155, so the home is ahead by £386,366. They come out level at house price growth of about −2.9% a year. Illustrative only, not a quote or advice.

How it works

Both sides start with the same cash and spend the same each month. The home side pays the deposit, stamp duty, fees, mortgage and upkeep; the shares side invests the same money and pays rent instead.
Leverage: the whole home moves with the market while only the deposit is yours, so a 10% move in the price is a much larger move in your equity, up or down.
Tax: a main home is normally free of capital gains tax. Shares in an ISA are untaxed; outside one, dividends above the allowance and gains above the annual exempt amount are taxed at today's rates.
Growth rates are scenarios, not forecasts, and no index data is used. The break-even rate is the house price growth at which the two come out level, with everything else as you set it.

Rent is part of a home's return

A home you live in pays you in rent you no longer pay, which is easy to leave out. Switch the rent off and this becomes a pure investment comparison; leave it on and it is the choice most people actually face.

Safer is a different question

Share prices can fall further and faster than house prices, and you see every move. A home's price moves more slowly, but it is borrowed against, slow and costly to sell, and concentrated in one place. This page shows the arithmetic; which risk suits you is a separate question.

Frequently asked questions

Is property a better investment than shares in the UK?

Neither is better in general. A home's result depends on house price growth, the mortgage rate, the costs of buying, owning and selling, and the rent it saves; shares depend on their return, fees and tax. The break-even rate on this page is the house price growth that would make them equal on your figures.

Why does a mortgage make a home's result so much larger?

Because the whole home rises or falls with the market while you put in only the deposit. With a 10% deposit, a 10% rise in price doubles your stake and a 10% fall wipes it out. The mortgage interest is the cost of that leverage.

How are the shares taxed here?

In an ISA, not at all. Outside one, dividends above the dividend allowance are taxed each year at the rate for the band you choose, and on a sale, gains above the annual exempt amount are taxed at the capital gains rate, both at today's rates carried forward. A main home is normally free of capital gains tax.

Where do the growth rates come from?

From you. The defaults are round numbers for illustration, not forecasts, and no index data is used. Try several: the strip under the chart shows the result at other house price growth rates.

Is this investment advice?

No. It compares two general ways of holding money using arithmetic and your own assumptions. It is not a recommendation to buy a home or any investment. The value of investments can fall as well as rise, you may get back less than you put in, and past performance is not a guide to the future.

Rent vs buy calculator Cash vs investing calculator Mortgage overpayment calculator Mortgages: equity, repayments and rates

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This calculator illustrates arithmetic from the figures you enter. It is not advice or a recommendation, and it does not forecast prices or returns. Tax figures use the rates in force today, carried forward, and treat every dividend and gain in the one band you choose. CoreFi does not advise on or arrange mortgages. CoreFi is a trading name of JG Core Ltd (company 16218779). Figures reviewed September 2026.