Buy an apartment or rent it? We've done the math

Although buying a flat can now pay off faster than renting three years ago, the opposite conclusion can be drawn for those buying on credit. However, there are many more pros and cons to consider when making such a basic life decision. At Bankier.pl, we calculated how buying your own “M” compares to renting a flat.

photo: My Ocean Production // Shutterstock

In our considerations and calculations, we focused only on the costs that must be incurred when deciding to purchase an apartment and the amount that must be transferred to the account of the owner of the apartment we are renting at the same time.

We have omitted difficult to estimate, but equally important issues such as the freedom and ease of changing the place of residence or less responsibility for the premises in the case of tenants and investing in your own asset and ultimately taking possession of it and the possibility of selling it in the case of people who decided to buy – independently or together with a bank – their own “M”. Thus, we also did not take into account the nominal change in the price of the apartment from taking out to paying off the debt.

The cost of housing and rent – what and how did we calculate?

In both cases, we analyzed a 50-meter premises. The cost of the loan, both the amount of interest and the total amount that must be paid to the bank, was calculated based on the same assumptions, i.e. a 20 percent down payment, equal installments and periodically fixed interest as the average of bank offers in January 2022, 2023, 2024 and 2025 based on Bankier.pl data.

We also assumed that the interest rate does not change throughout the entire loan repayment period. Of course, we added the funds for the down payment to the total cost of buying a flat on credit. We did not take into account the situation in which the person repaying the loan refinances it.

To calculate the costs of purchasing an apartment, we used Bankier.pl data provided by Cenatorium regarding average transaction prices in the first quarters of 2022–2025. We estimated the rental costs based on Otodom Analytics data described on Bankier.pl every month, illustrating average offer prices in January 2022, 2023, 2024 and 2025.

Since it is difficult to predict how rental prices will behave in the coming years, we have assumed that the rent amount will not change from the moment the agreement is signed.

When buying a flat, you should also remember about additional costs that you have to pay right from the start. These are notary fees, court fees and, in the case of some second-hand flats, also tax on civil law transactions and an agent's commission.

We decided to compare costs for the last four years because it was a hot time for both the apartment sales and rental markets, which was mainly influenced by two events. In chronological order, the first was the outbreak of the war in Ukraine and the influx of refugees to Poland, which led to a sharp increase in average asking rent prices, by as much as 40% y/y.

Average asking prices for apartment rentals in selected cities (40-59 sq m)
Infogram

The second was the launch of a government program to subsidize housing loans called “Safe Credit 2%,” which increased housing prices by about 20% in just one year.

The last two years on the rental market and the last year on the apartment sales market have been a time of stabilization. The average valuation of rent dictated for a 50-meter apartment increased during this time from less than 1 percent in Warsaw to 4.5 percent in Wrocław and Poznań.

The average prices paid for 50-meter apartments, based on the latest data for Q1 2025, increased year-on-year from about 1% in Gdańsk to 5.6% in Wrocław.

Average transaction prices of apartments in selected cities (35-60 sq m)
Infogram

However, over a three-year period, we are talking about increases in the average amounts expected by landlords from around 30% in Łódź and Wrocław to over 46% in Kraków, and average transaction prices of apartments higher by 23–38%.

Buying a flat for cash or renting

Given the above assumptions, it is easiest to compare the cost incurred by buyers of an apartment for cash with the expenses they would have to incur when renting an apartment. According to data from Bankier.pl, the profitability of purchase has increased slightly over the last three years.

The expense incurred for the purchase of a 50-meter apartment, in the case of the six largest Polish cities, will “pay off” the fastest in Warsaw, after less than 15 years. The total cost is equal to the funds needed to pay 179 monthly rents.

The cost of buying an apartment for cash in relation to the number of monthly rents
City	Time to buy and rent an apartment	Time to buy and rent an apartment	Time to buy and rent an apartment	Time to buy and rent an apartment
	Q1 2025	Q1 2024	Q1 2023	Q1 2022
Warsaw	179*	176	149	189
Poznan	196	197	169	198
Łódź	193	200	155	177
Cracow	204	201	171	221
Wroclaw	191	187	149	180
Gdansk	186	189	167	205
*according to the average apartment transaction price for Q1 2025 and the average rental offer price for January 2025.
Source: Bankier.pl based on data from Cenatorium and Otodom Analytics

It takes the longest to “break even” in Kraków – 204 months, or exactly 17 years.

Three years ago, shortly before the rental rates shot up and a year and a half before the implementation of the “Safe 2% Credit”, this period was longer in Warsaw (15.7 years), Poznań (16.5 years), Kraków (18.4 years) and Gdańsk (17.1 years). Due to the faster growth of housing prices than rental rates, buying your own “M” has become slightly less profitable in Łódź and Wrocław.

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Rent or buy on credit?

According to data from the National Bank of Poland, in contrast to investment purchases, the vast majority of those buying apartments for their own needs or for another family member in recent years carried out the transaction based on a housing loan. The percentage of such transactions has ranged from 65 to even 82 percent in recent years.

So how does this expense compare to the rent paid for a rented apartment? First, let's compare the average monthly rent with the average installments that, based on the above assumptions, should be paid in the case of buying a 50-meter apartment in one of the six largest Polish cities.

Currently, the installment amount is from 4 percent (Warsaw) to even 18 percent (Wrocław) higher than the rent. Although buyers of apartments in both early 2025 and 2024 are currently in a similar situation, this was not always the case.

Those who took out a loan with a periodically fixed interest rate at the beginning of 2023 are in a much better situation. As our simulation shows, the installment paid by those making a purchase in Warsaw and Wrocław is on average 5 percent lower than the average rent dictated at the time of purchasing the apartment and taking out the loan.

In the case of the simulation conducted for Warsaw, the potential borrower returned PLN 104.2 thousand to the bank from January 2023 to the end of May 2025, of which PLN 14.2 thousand was capital and PLN 90 thousand was interest. At the same time, the landlord transferred PLN 109.7 thousand to the account of the owner of the apartment.

Those who took out a loan in January 2025 will have repaid from PLN 12.8 thousand (Łódź) to PLN 20.5 thousand (Warsaw) by the end of May. If they had rented instead of taking a loan, the rent paid to the landlord would have amounted to PLN 11.4 thousand in the case of Łódź to PLN 19.7 thousand in Warsaw.

Total cost of mortgage and rent

Let's now move on to the total amount that would have to be paid for the apartment, taking out a 25-year loan and not refinancing it. As it results from Bankier.pl calculations made on the basis of the assumptions presented at the beginning, the cost of purchasing your own “M” with an area of 50 sq m would range from PLN 857 thousand in Łódź to PLN 1.37 million in Warsaw. This data is for those taking out a loan in January 2025.

The total cost of renting and purchasing a 50-meter apartment based on for a housing loan within 25 years [in PLN]
City	Type of transaction	Time of transaction	Time of transaction	Time of transaction	Time of transaction
		Q1 2025	Q1 2024	Q1 2023	Q1 2022
Warsaw	Buying an apartment	1 368 996*	1 335 817	1 190 746	952 336
	Renting an apartment	1 180 200*	1 152 300	1 134 900	832 800
Poznan	Buying an apartment	984 734	967 448	877 720	698 404
	Renting an apartment	777 900	745 200	738 300	581 100
Łódź	Buying an apartment	857 649	850 612	745 168	569 801
	Renting an apartment	685 200	645 900	682 800	531 300
Cracow	Buying an apartment	1 243 756	1 213 159	1 084 324	863 205
	Renting an apartment	943 200	917 400	900 600	643 500
Wroclaw	Buying an apartment	112 8031	1 085 962	956 638	764 343
	Renting an apartment	913 500	883 200	912 300	700 500
Gdansk	Buying an apartment	112 0555	1 128 394	1 023 919	853 383
	Renting an apartment	933 300	906,000	869 700	687 600
*according to the average apartment transaction price for Q1 2025 and the average rental offer price for January 2025.
Source: Bankier.pl based on data from Cenatorium and Otodom Analytics

There have been no significant changes compared to January 2024. However, over a three-year period, this cost, primarily due to rising housing prices but also changing average mortgage interest rates, has increased from 31% in Gdańsk to over 50% in Łódź.

In the analyzed period, i.e. over 25 years, rent, according to average rates entered in advertisements in January 2025, would involve an expense from PLN 778 thousand in Łódź to PLN 1.18 million in Warsaw. The expense incurred for one's own apartment would therefore be from 16 percent and nominally from PLN 189 thousand (Warsaw) to almost 32 percent and PLN 301 thousand (Kraków) higher.

In each case, however, the key word is the word “own” used a few sentences earlier. When buying a flat on credit – a truism – we will eventually end up owning it. When renting, each time – although just like in the case of credit – we will transfer the money to someone else's pocket, ultimately the flat will not be our property.

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