Acquisition costs: everything you pay on top of the purchase price

Why acquisition costs are crucial in any buy or rent comparison

When people compare buy or rent, they often look only at the listing price or the mortgage payment. Yet acquisition costs can easily add 10–15% on top of the price. Ignoring them completely distorts the calculation of your total purchase costs and therefore the comparison with renting.

On buy-or-rent.net, these costs are modelled explicitly through two key simulator parameters:

• montant_fn: the amount of notary / closing fees (including taxes)
• montant_fa: the amount of agency / broker fees

Understanding how they are calculated and how they affect your budget is essential before deciding whether it makes more sense for you to buy or rent. It always depends on your situation, your holding period and your saving capacity.

The main categories of acquisition costs you will face

Beyond the net price paid to the seller, a property purchase usually includes:

• Notary / legal fees (montant_fn in the simulator): typically 7–8% of the price for existing homes, 2–3% for new builds (French market benchmark)
• Agency / broker fees (montant_fa): often 3–5% of the price
• Loan guarantee / mortgage registration fees: roughly 1–2% of the loan amount
• Bank application fees: a few hundred euros
• Immediate renovation works: from a few thousand to tens of thousands of euros

In our buy or rent simulator, we highlight montant_fn and montant_fa because they are paid upfront and immediately reduce your financial wealth.

Notary / closing fees (montant_fn): what you really pay

What is included in notary fees?

The amount grouped under montant_fn in the simulator does not go fully to the notary. It is made up of:

• Transfer taxes and stamp duties: the bulk of the 7–8% figure in existing property, paid to the State and local authorities
• Notary remuneration: a regulated sliding-scale fee
• Disbursements: administrative costs the notary advances (land registry, mortgage registration, certificates, etc.)

For quick estimation of total purchase costs, most buyers use the following rules of thumb:

• Existing property: 7–8% of the purchase price
• New build: 2–3% of the purchase price

Numeric example: existing vs new

Assume you are hesitating between buy or rent and you are looking at buying a flat for €300,000.

• Existing property (7.5% assumed):
  • montant_fn ≈ €300,000 × 7.5% = €22,500
• New build (2.5% assumed):
  • montant_fn ≈ €300,000 × 2.5% = €7,500

The difference on notary fees alone is €15,000. In the buy or rent simulator, this gap is fully integrated into the long‑term wealth comparison between buying and renting + investing.

Effect on down payment and borrowing

Banks often expect buyers to cover notary fees (montant_fn) with their own savings. If you have €40,000 saved and your notary fees are €22,500:

• Only €17,500 are left as down payment to reduce the loan amount
• Your monthly repayment at a mortgage rate around 3.6% (typical 2024 rate) will be higher than if you could use the full €40,000 as down payment

From a buy or rent perspective, the €22,500 spent on acquisition costs cannot be invested in financial assets (ETFs, savings accounts, etc.) at the investment rate you set in the simulator (for example 4% per year). That is a real opportunity cost.

Agency / broker fees (montant_fa): a widely underestimated cost

Who actually pays agency fees?

Agency fees (montant_fa) are usually between 3 and 5% of the purchase price, sometimes more. Listings may show:

• a price “including agency fees”
• or a breakdown between “net seller price” + commission

In all cases, it is the buyer who ultimately pays, because agency fees are built into the total purchase costs and the amount you need to finance.

Numeric example on €300,000

Let’s take the same €300,000 flat with 4% agency fees:

• montant_fa = €300,000 × 4% = €12,000

If the listing says “€300,000 including fees” and the net seller price is €288,000:

• Net seller price: €288,000
• Agency fees (montant_fa): €12,000
• Notary fees base: often the net seller price (to be confirmed with your notary)

In the buy or rent simulator, you can enter the property price and montant_fa separately, which helps you see the weight of this cost in your total purchase costs.

Agency fees and holding period

Agency fees are paid once, at purchase. Their relative weight depends strongly on how long you keep the property:

• If you sell again after 3 years, €12,000 in fees effectively cost you €4,000 per year
• If you keep the property for 15 years, that’s only €800 per year

In a buy or rent framework, a short holding period makes acquisition costs much more penalising compared to renting.

Total purchase costs: a full numeric case study

Scenario: buying a €300,000 existing flat vs renting

Imagine you are deciding whether to buy or rent and you consider:

• buying an existing flat for €300,000 (fees included)
• or renting a similar place instead

Main assumptions:

• Price including agency fees: €300,000
• Agency fees (montant_fa): 4% = €12,000
• Net seller price: €288,000
• Notary fees (montant_fn): 7.5% of net seller price ≈ €21,600
• Loan guarantee + bank fees: €4,000 (order of magnitude)
• Immediate renovation: €8,000

Calculating the initial total purchase cost

Your total purchase costs at completion are:

• Price including agency fees: €300,000
• + montant_fn: €21,600
• + guarantee + bank fees: €4,000
• + immediate works: €8,000
• = €333,600

The two simulator parameters highlighted in this article are:

• montant_fa = €12,000
• montant_fn = €21,600

So you pay €33,600 of acquisition costs on top of the net seller price. This amount will not be recovered directly when you sell the property.

Comparing with renting using the simulator

Suppose you could rent a similar property for €1,200/month, with an annual rent increase linked to an inflation index (e.g. 2% per year). If you choose to rent, you can:

• keep the €33,600 acquisition costs in cash
• invest them at the investment rate you set in the simulator (say 4% per year net)

After 10 years, €33,600 invested at 4% annually grows to roughly €49,800. This financial capital is weighed against the home equity you would have built if you had bought. The buy or rent simulator shows this trade‑off numerically.

How acquisition costs shape your buy or rent strategy

1. Planned holding period

Acquisition costs (montant_fn + montant_fa) are fixed at the start. The longer you keep the property, the more they are “amortised” over time:

• Short‑term project (under 5–6 years): these costs weigh heavily; renting and investing the difference can sometimes be more attractive
• Long‑term project (10–20 years): they become proportionally smaller compared with property value and principal repaid

2. Saving capacity and investment rate

If you can save significant amounts each month and invest at an investment rate of 4–6% per year (e.g. diversified ETFs), then:

• the €30–40k paid in acquisition costs represent capital that could have compounded for years
• a rent + invest strategy may end up competitive versus buying

On the other hand, if you struggle to save regularly, buying a home can act as a form of “forced saving”, despite these upfront costs. Again, there is no universal answer, only numbers to compare in a buy or rent simulation.

3. Mortgage rates and inflation

With mortgage rates around 3.6% in 2024 and recent inflation above 4% in many countries, the real cost of your loan is partially eroded by inflation. However, acquisition costs (montant_fn, montant_fa) are paid immediately and are not spread over time.

It is therefore crucial to integrate them from day one into your total purchase costs in the buy or rent simulator, instead of focusing only on monthly repayments.

How to enter montant_fn and montant_fa correctly in the simulator

Step 1: estimate notary / closing fees (montant_fn)

To fill in montant_fn in the buy or rent simulator, you can:

• use simple percentages:
  • 7–8% of the price for existing properties
  • 2–3% for new builds
• or ask your notary or lender for a detailed closing cost estimate

Example: for an existing property worth €250,000 (excluding agency fees), with 7.5% notary fees:

• montant_fn ≈ €250,000 × 7.5% = €18,750

Step 2: estimate agency / broker fees (montant_fa)

For montant_fa:

• if the listing says “fees paid by the seller”, you can still estimate them (3–5% of the price) because they are included in the price you pay
• if the listing shows the commission explicitly, simply enter that amount

Example: on a property listed at €260,000 including 5% agency fees:

• montant_fa = €260,000 × 5% = €13,000

By combining montant_fn and montant_fa, the simulator can calculate realistic total purchase costs and compare them with a renting scenario where you invest those sums at your chosen investment rate.

Other ownership costs you should not ignore

This article focuses on acquisition costs (montant_fn and montant_fa), but a robust buy or rent analysis should also account for:

• Property tax and its annual reassessment (property tax increase)
• Borrower insurance (insurance rate often 0.25–0.45% of the loan amount)
• Service charges and regular maintenance
• Renovation costs over time (energy upgrades, DPE rating improvements, compliance works)
• Possible prepayment penalties if you sell before the end of the loan (capped at 3% of remaining principal or 6 months’ interest)

These elements are also integrated into the buy or rent simulator so you can compare ownership and renting over 10, 15 or 20 years on a consistent, data‑driven basis.

Conclusion: acquisition costs must be in your buy or rent equation

Acquisition costs (notary fees via montant_fn, agency fees via montant_fa) can represent tens of thousands of euros on top of the purchase price. They affect:

• the size of your required down payment
• your borrowing capacity
• how much capital you have left to invest in financial assets
• the real return of buying compared with renting

There is no one‑size‑fits‑all answer to the question of whether you should buy or rent. It depends on your personal situation, time horizon, risk profile and local market conditions. The information above is generic and does not constitute personalised financial advice.

The most useful next step is to simulate your own case, entering your specific acquisition costs (montant_fn, montant_fa), mortgage rate, investment rate, inflation and rent growth assumptions.

Simulate your situation on buy-or-rent.net