Rent or buy — one of the most frequently asked questions in the Lithuanian real estate market. The answer depends on many factors: your financial situation, life plans, market conditions, and personal priorities. In this article, we analyze both options and help you decide which makes more sense.
When does renting make sense?
Renting is the better choice in several situations. First, if you have not yet decided on a city or district. Renting provides flexibility — you can easily relocate if your job or circumstances change. Second, if you do not have a sufficient down payment. Saving 15–20 % of an apartment value can take several years, and renting lets you live in your preferred location in the meantime.
Third, if you plan to stay in a particular location for fewer than 5 years. Buying and selling an apartment involves significant transaction costs (notary, agents, taxes) that only pay off over a longer period. Fourth, if interest rates are very high — then the mortgage payment can be significantly higher than renting an equivalent apartment.
When does buying make sense?
Buying usually pays off if you plan to stay in the same place for at least 5–7 years. Over that time, property values typically appreciate, and each mortgage payment reduces your debt. In essence, part of each monthly payment goes toward building your wealth.
Buying also makes sense when rent is close to the mortgage payment. In Vilnius, renting a 2-bedroom apartment in the center costs around 500–700 euros per month. An equivalent mortgage payment (with 15 % down, 25-year term) can be similar or even lower, depending on interest rates.
Financial analysis: a concrete example
Let us examine a specific scenario: a 55 sqm apartment in Žirmūnai, valued at 200,000 euros. Rental price: 700 euros/month.
Renting scenario (10 years): Over 10 years, you would pay approximately 96,000 euros in rent (assuming 3 % annual rent increases). After 10 years, you own no property.
Buying scenario (10 years): With a 30,000 euro down payment and a 170,000 euro loan over 25 years (5 % interest), the monthly payment is approximately 994 euros. Over 10 years, you pay about 119,280 euros, of which roughly 50,000 goes toward principal repayment. If the apartment value increases 25 % over 10 years (to 250,000 euros), your equity is: 250,000 – 120,000 (remaining debt) = 130,000 euros.
Hidden advantages of renting
- No need to handle repairs and maintenance — that is the owner's responsibility
- You can invest the saved down payment in other instruments (stocks, funds)
- Flexibility to change your living location
- No risk of property value decline
Hidden advantages of buying
- Protection against rising rent prices
- Freedom to renovate and customize the apartment
- Psychological comfort of homeownership
- Potential to earn from long-term value appreciation
- Additional income source if you decide to rent it out later
What to consider when deciding?
The most important question is how long you plan to live in that location. If fewer than 5 years — renting is likely better. If more — buying starts to pay off. Also evaluate your financial stability: do you have stable income, can you handle unexpected expenses (repairs, interest rate increases)?
Use our rent vs buy calculator to compare both scenarios with your specific numbers — income, rent price, apartment value, and loan terms.
Conclusion
There is no universal answer. Both renting and buying have advantages and drawbacks. The key is to make a decision based on your situation and the numbers, not emotions or social expectations. Buying real estate is not automatically a "good" decision, and renting is not "throwing money away."