"Why pay rent when the mortgage payment would be lower?" is the question we hear most often from tenants. The answer is less simple than it looks, because a mortgage payment and a rent are not comparable numbers. Part of the payment is principal — it reduces your debt and stays yours. Rent is pure cost. On the other hand, an owner carries costs a tenant never sees.
The fairer comparison is between the unrecoverable costs of each option — the money that is gone for good either way. Below is the method, an example at current rates, and the point at which the answer flips.
Figures verified as of October 2026 and indicative. The example is an illustration with stated assumptions, not market averages.
Rent — and, when moving, a deposit that is normally returned. Rent does rise, though: Eurostat data put annual rent growth in Bulgaria at 7.6% in September 2026, down from 11.9% at the end of 2025 (see our rents report).
An owner's unrecoverable costs come in four parts:
On top of that come the one-off costs of buying — in Sofia the local transfer tax is 3% (0.1% to 3% depending on the municipality), the registration fee 0.1%, the notary fee per the official tariff (notary calculator) and possibly an agency commission. None of this comes back; it has to be "earned back" over the years you live in the home.
Assumptions (illustrative, not market averages):
The monthly payment is about €672 (you can check it in our mortgage calculator). That looks cheaper than €850 of rent — but let's see how much of it is actually cost.
| Unrecoverable cost (first year) | Amount |
|---|---|
| Interest (≈ 2.5% on the balance) | ≈ €4,206 |
| Building tax and waste fee (assumption) | €300 |
| Upkeep at 1% of the price (assumption) | €2,000 |
| Return forgone on ≈ €36,200 of own money at 1.38% | ≈ €500 |
| Total for the owner | ≈ €7,000 a year (≈ €584 a month) |
| Rent | €10,200 a year (€850 a month) |
On these assumptions, owning costs about 3.5% of the price a year in unrecoverable costs. The rule of thumb that follows: if a year's rent on a comparable home is more than about 3.5% of its price, buying is cheaper on a running basis; if it is less, renting is.
In the example the gap is about €3,200 a year in favour of buying. The Sofia transfer tax and registration fee alone come to €6,200. So it takes around two years just to recover those — longer once you add the notary fee, any commission and the costs of selling later.
That is why the most important question is not "rent or buy" but how many years you will live in this home. If you expect a change of city, job or family situation within two to three years, renting is usually the more sensible choice, even when the monthly arithmetic seems to favour buying.
If you are looking at buying as an investment rather than to live in, the calculation is different — see how to calculate rental yield.
Don't compare the payment with the rent. Compare interest, tax, upkeep and the cost of your own money with a year's rent — at current rates that is about 3.5% of the home's price. Then answer honestly how long you will live there: in Sofia the one-off costs take at least two years to earn back.
If you would like us to run the numbers on a specific home and a specific offer, call us or come into the office. We'll work through it together, without rushing.
Interest rates from BNB data for August 2026, rents from Eurostat data to September 2026, verified as of October 2026. The example is an illustration with stated assumptions; figures are indicative.
