Rent or Buy in Kampala? The Break-Even
Updated 3 November 2026 · Land & Property editorial team
At today's shilling mortgage rates, renting is cheaper for years. On a UGX 300 million home bought with a 30% deposit at 18.73%, the loan costs UGX 3.36 million a month, against an assumed rent of UGX 1.8 million. In our model buying only breaks even if prices and rents rise about 8% a year (17 years) or 10% a year (7 years). Every input is shown so you can change it.
- Central Bank Rate
- 12% since 14 October 2026
- Average shilling lending rate, Feb 2026
- 18.73%
- Loan payment, UGX 210M over 20 years at 18.73%
- UGX 3,359,401 a month
- Assumed rent for the same home (our input)
- UGX 1,800,000 a month
- Break-even at 5% yearly growth
- Not within 30 years in our model
Is it cheaper to rent or buy in Kampala?
On cash flow, renting is cheaper at current interest rates. On long-run wealth, buying can win, but only if property prices and rents keep rising fast enough to outrun the interest. We built a simple model so you can see where the line sits. It is a worked calculation with stated inputs, not an opinion and not a forecast.
The home is an illustrative UGX 300 million. That is below the median asking prices in our own listings, which were UGX 765 million for houses and UGX 1.3 billion for apartments (Land & Property listings, Nov 2026, 14 houses and 19 apartments), but our snapshot also includes homes from UGX 170 million and UGX 132 million, so the figure is realistic for a smaller home. Search house listings to find a price near you and re-run the numbers.
What are the assumptions?
Three inputs come from sources, and the rest are our assumptions. Change any of them and the result changes.
| Input | Value | Where it comes from |
|---|---|---|
| Purchase price | UGX 300,000,000 | Illustration |
| Deposit | 30% (UGX 90,000,000) | Housing Finance Bank lends 70% of value, per its FAQ |
| Loan | UGX 210,000,000 over 20 years | Housing Finance Bank, up to 20 years on home loans |
| Interest rate | 16%, 18.73% or 22% | 18.73% is the Feb 2026 average shilling lending rate; 16% to 22% is a housing finance profile's range |
| Buying costs | 3% of price | Our assumption: stamp duty is 1.5%, and we add 1.5% for legal and other costs |
| Running costs | 1% of value a year | Our assumption for repairs, insurance and service charge |
| Selling costs | 3% of value | Our assumption |
| Rent | UGX 1,800,000 a month (7.2% of price a year) | Our assumption, not a market figure; we tested UGX 1.2M to 3M |
| Return on the renter's savings | 10% a year | Our assumption |
The renter puts the same cash the buyer spends up front (the deposit of UGX 90 million plus buying costs of UGX 9 million) into savings, and adds each month's difference when owning costs more than renting. Prices and rents grow at the same yearly rate. We did not model tax, vacancy or a change of rate during the loan.
When does buying pay off?
The table gives the year in which the buyer's net worth (home value after selling costs, minus the loan balance) first passes the renter's savings. Rent is UGX 1.8 million a month. "More than 30" means no break-even within 30 years.
| Loan interest rate | 3% yearly growth | 5% yearly growth | 8% yearly growth | 10% yearly growth |
|---|---|---|---|---|
| 16% | More than 30 | More than 30 | Year 9 | Year 4 |
| 18.73% | More than 30 | More than 30 | Year 17 | Year 7 |
| 22% | More than 30 | More than 30 | Year 25 | Year 12 |
The pattern is clear. At the 18.73% average, the monthly loan payment of UGX 3,359,401 is almost twice the assumed rent. The buyer must hold the home a long time, and prices must rise strongly, before the equity makes up for it. We cannot say what Kampala prices will do. We have no verified long-run price series for Kampala, so the growth rates are tests, not forecasts.
How sensitive is the answer to rates and to rent?
Very. Rent matters as much as the interest rate. This table holds the rate at 18.73% and varies the monthly rent.
| Monthly rent | 3% growth | 5% growth | 8% growth | 10% growth |
|---|---|---|---|---|
| UGX 1,200,000 | More than 30 | More than 30 | More than 30 | Year 17 |
| UGX 1,800,000 | More than 30 | More than 30 | Year 17 | Year 7 |
| UGX 2,400,000 | More than 30 | Year 29 | Year 6 | Year 3 |
| UGX 3,000,000 | More than 30 | Year 9 | Year 3 | Year 2 |
If your rent is near the loan payment, buying wins quickly in every growth case except the slowest. If your rent is far below it, renting wins for most of your working life. On rates, the central bank raised its policy rate from 9.75% to 12% on 14 October 2026, and the Monitor reports the Bank of Uganda expects inflation to rise. We found no new mortgage rate published after that, so the 18.73% and 22% rows may be the more useful ones. A fall in rates would help buyers, but the Mortgage Refinance Institutions Act has not yet changed prices as far as we found; see Mortgages in Uganda.
What matters besides money?
The model leaves out things that money cannot measure, and they often decide the choice.
- Title risk. A home on a weak title can lose all its value. Check the title before you pay; our guide to buy land or house compares the two routes.
- Flexibility. A renter can move for work in weeks. A buyer pays about 6% to buy and sell in our assumptions.
- Control. An owner can alter the home, and a renter cannot. An owner also pays for repairs and, in an apartment, service charges.
- Currency. If your income is in dollars or pounds, the shilling is the risk. See Shilling vs Dollar.
- Land first. Many people buy a plot first and build later. Read land loan Uganda bank for borrowing to buy land.
How can I run the numbers for my own case?
Take three steps. First, ask a bank for a written offer, with the rate, fees and term, so you have your real monthly payment. Second, get two or three real rents for homes like the one you would buy, from listings or neighbours. Third, compare the payment with the rent: if the payment is more than about double the rent, renting is likely to stay cheaper for a long time at these rates. Our Property Costs, Taxes and Mortgages in Uganda guide lists the costs to include, and the Owning Land Through a Company in Uganda page covers a different holding route. If you want help, ask our team on WhatsApp or by email, or browse plot listings if you prefer to start with land.
Listings available now
Live from Land & Property on 4 November 2026. Prices are the sellers' asking prices.
-
25 Decimals in Bunga at Ugx820m
UGX 820,000,000
-
1 acre for sale in Kololo at $2,500,000
UGX 9,250,000,000
-
Plot For sale in Masoli kitetika at 80m
UGX 80,000,000
-
33 Decimals in Bukoto Town at Ugx1.4bn
UGX 1,400,000,000
-
53 decimals commercial Plot in Bukoto
UGX 3,500,000,000
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71 decimals in Kira Bulindo at Ugx500m
UGX 500,000,000
Frequently asked questions
Is it cheaper to rent or buy in Kampala?
At an 18.73% loan, a UGX 210 million mortgage costs about UGX 3.36 million a month, while our assumed rent for the same home is UGX 1.8 million. So renting is cheaper month to month. Buying can win in the long run only if prices and rents rise strongly.
When does buying pay off?
In our model, with rent at UGX 1.8 million and an 18.73% loan, buying breaks even in year 17 if prices and rents grow 8% a year, and year 7 at 10%. At 5% a year it does not break even within 30 years. These are assumptions, not forecasts.
What interest rate should I use?
The average shilling lending rate was 18.73% in February 2026, and a housing finance profile quotes 16% to 22%. The central bank rate rose to 12% on 14 October 2026, so test higher rates too. Use the rate in your own bank's written offer.
Does the rent I enter matter?
Yes, as much as the interest rate. At 18.73% and 8% yearly growth, a UGX 1.2 million rent never breaks even in 30 years, while UGX 2.4 million breaks even in year 6. Use real rents for the type of home you would buy.
Should I buy land instead of a house?
Land costs less to hold and has no loan in many cases, but it earns no rent unless you build. It depends on your plans and title. Our guide compares buying land or a house, and our listings show current plots and homes.
Sources
- BoU raises interest rate to 12% as Uganda shilling weakness stokes inflation (Oct 2026), Daily Monitor (accessed 2026-11)
- Bank of Uganda raises benchmark interest rate to 12% (14 Oct 2026), Nairametrics (accessed 2026-11)
- Uganda's shilling lending rates rise to 18.73% in February 2026 (23 Apr 2026), Eagle Online (accessed 2026-11)
- Uganda: housing finance profile, Centre for Affordable Housing Finance in Africa (accessed 2026-11)
- Diaspora FAQs (mortgage terms and document list), Housing Finance Bank (accessed 2026-11)
- MZO service costs (May 2025), Ministry of Lands, Housing and Urban Development (accessed 2026-11)
- 10 quick facts on TIN requirement for land transactions above UGX 10 million (includes stamp duty on land), Uganda Revenue Authority (accessed 2026-11)