Rent or buy in Berlin?

What the calculator compares

Comparing rent with the loan payment is misleading. Part of the payment is repayment, that is, money that stays with you as wealth. The calculator therefore compares what buyer and renter own after a given number of years.

For the buyer that is the value of the flat minus the remaining debt. For the renter it is their equity, which they do not put into a flat but invest. Whoever spends less in a given year also invests the difference: if the buyer pays more for interest, repayment and maintenance than the rent costs, the renter saves the difference. If the rent is higher, the buyer saves.

The assumptions are open in the calculator. Repayment is 2% at the start, the additional purchase costs around 11.6% (exactly 11.57). For maintenance it sets 1% of the purchase price each year, and invested money earns 3% interest. You set the rises in rent and value yourself. Taxes are left out.

Price-to-rent multiplier: 30.6 annual rents

How expensive buying is relative to rent is shown by the price-to-rent multiplier, that is, the purchase price divided by the annual net cold rent. For Berlin, the Investitionsbank Berlin (IBB) gives in its housing market report 2025 a mean asking price of €5,789 per square metre for owner-occupied flats and a mean asking rent of €15.78. €5,789 divided by €189.36 annual rent (€15.78 times 12) gives 30.6.

Worked the other way round, a flat at these values yields 3.3% of its price in net cold rent per year (100 divided by 30.6). According to the Deutsche Bundesbank, the effective interest rate for residential construction loans in August 2026 was between 3.81% and 4.40%. Anyone who finances almost everything therefore pays more interest than the same flat would cost to rent. Maintenance and ancillary costs come on top.

By district, the multipliers from asking prices range from 24.9 in Spandau to 34.7 in Lichtenberg. Notarised sales of multi-family buildings give lower values; the difference is explained on the page Price-to-rent multiplier in Berlin.

There is one thing the asking rent does not show. Someone who has lived in the same flat for years often pays less than new tenants. So enter in the calculator the rent you would really pay: your current one if you can stay, the market rent if you are moving anyway.

Worked example: 70 square metres at the Berlin mean

A flat of 70 square metres costs €405,230 at the Berlin mean asking price. A comparable rental flat costs €1,104.60 net cold per month. The buyer brings €80,000 in equity and pays 3.8% interest.

Example with an assumed interest rate, not an offer. Prices and rent: IBB housing market report 2025, asking values for Berlin overall.

In the first year the buyer pays €14,140 in interest and sets aside €4,052 for maintenance. They also lose €2,400 in interest on their equity (€80,000 times 3%). Together that is €20,592 that does not come back. The renter pays €13,255 in rent. Repayment is deliberately missing from this comparison, because it stays as wealth.

Where the figures after one year come from: the buyer pays €21,583 in loan payments and €4,052 for maintenance, together €25,635. The renter pays €13,255 in rent and invests the difference of €12,380. Their wealth: €80,000 times 1.03 plus €12,380, so €94,780. With 1.5% rise in value, the buyer's flat is worth €411,308, and the remaining debt is €364,673. The difference of €46,636 is their wealth.

With 1.5% rise in value and 2% rise in rent per year, the wealth of both develops like this:

The buyer's shortfall after one year comes almost entirely from the additional costs. The €46,885 is spent with the notary appointment. After that the buyer catches up because they repay and the renter's rent rises every year. With these assumptions the buyer overtakes the renter in year 23.

Holding period, interest, equity: what tips the result

None of the assumptions is a forecast. The calculator shows what happens if they come true. The table changes one variable of the example at a time and keeps the rest the same.

BBI's own calculation using the calculator's logic on this page, as of 28 October 2026.

Time has the strongest effect. If you sell again after five years, you end up in the example with €104,582 against €155,682 for the renter. A sale would bring costs of its own, which the calculator does not show. In this model, the longer you stay, the more likely buying is to pay off.

Interest has almost as strong an effect. 0.8 percentage points less moves the point at which buying is ahead from year 23 to year 14. However, after the fixed-rate period a new interest rate applies, which nobody knows today. The calculator keeps it the same throughout.

More equity helps less than you would expect, because it also earns interest for the renter: from €40,000 to €150,000, the point moves only from year 25 to year 22.

That leaves the rise in value. Without it, the renter is ahead over 30 years in the example; with 2% a year, the buyer is ahead from year 16. Whether Berlin flats will gain in value in future is not something this page can tell you. Try several values and check whether your decision also holds in the unfavourable case.

One assumption is hidden in the model: the renter really does invest every euro saved. If you tend, from experience, to spend the difference to the payment, you end up with no investments, and the comparison turns out worse for renting than in the calculator. For many buyers, repayment is therefore above all a savings plan they cannot pause.

The district shifts the point

Because the price-to-rent multiplier differs so much by district, the same calculation comes out differently depending on location. The table takes the assumptions of the example (70 square metres, €80,000 equity, 3.8% interest, 1.5% rise in value and 2% rise in rent) and inserts the asking values of the district concerned.

Purchase price and rent: IBB housing market report 2025, asking values by district times 70 m². Calculation using the calculator's logic, BBI's own calculation.

What decides it is not the price per square metre but its ratio to rent. Mitte is the most expensive district and still does better than the Berlin average, because rents are also highest there. In Lichtenberg it is the other way round. Whether an individual flat matches the district mean only becomes clear when you compare it with the rent for a similar flat in the same building or the neighbourhood.

What no calculation shows

As a tenant you can give notice with three months' notice (§ 573c BGB (German Civil Code)) and move when your life changes. Your landlord, by contrast, needs a legitimate interest to give notice, for example personal use (§ 573 BGB). As an owner you decide about your flat yourself, but you bear special levies of the owners' association and the interest rate risk on follow-on financing.

A let flat as an investment follows a different calculation, with rental yield and taxes. More on this is in the guide Buying a let flat.

The 1% for maintenance is also a rough figure. For an owner-occupied flat, part of it flows through the service charge (Hausgeld) into the maintenance reserve, and you bear the rest for your own rooms. A period building (Altbau) with a riser pipe renovation due can cost considerably more, a new build less in its first years.

If you lean towards buying after running the numbers, the household calculation comes next: How much property can I afford? The buying power check shows how much floor space your budget gives in the districts, and what the bank looks at is under Can I get mortgage financing?

Sources

• Investitionsbank Berlin, IBB Housing Market Report 2025, asking prices and asking rents by district
• IBB housing market report 2025, table volume (PDF), tables 25 and 27; price-to-rent multiplier and worked example are BBI's own calculation
• Deutsche Bundesbank: residential mortgage loans to households, effective interest rates on new business (August 2026, provisional, as of 1 October 2026)
• § 573 BGB (German Civil Code), ordinary termination by the landlord; § 573c BGB, notice periods
• BBI: Additional purchase costs in Berlin (6.0% real estate transfer tax, 1.5 to 2.0% notary and land register, 3.57% buyer's commission)
• All sources accessed on 28 October 2026.