Investment returns in 2026: comparing yields to decide whether to buy or rent

Investment returns in 2026: why the placement rate drives the buy or rent outcome

In 2026, investment returns are once again a key variable when deciding whether it is more attractive to buy or rent. With regulated savings accounts around 2.5–3%, euro‑denominated life insurance funds at 2.5–3.5%, and global equity ETFs potentially targeting 5–7% over the long term (with no guarantee), the placement rate used in any simulator can completely flip the result.

In the buy-or-rent.net / acheter-ou-louer.com simulator, this is controlled by the taux_placement parameter: the average annual return you expect on your savings if you stay a tenant instead of buying. Understanding this figure is essential if you want to interpret a buy or rent calculation correctly in 2026.

1. What exactly is the “placement rate” in 2026?

The placement rate (taux_placement in the tool) is the average annual yield of your financial savings, net of management fees, but usually before tax. The simulator uses it to project the future value of your capital if you decide to remain a tenant and invest the money you do not put into property.

1.1. Benchmarks for investment returns in 2026

• Regulated savings (e.g. Livret A): around 2.5–3% in nominal terms, tax‑free in France.
• Euro funds in life insurance: 2.5–3.5% gross, net of management fees, tax treatment separate.
• Bonds / bond funds: typically 3–4.5% depending on duration and risk.
• Global equity ETFs: expected 5–7% per year over the long run, but highly volatile.
• PEA / brokerage account portfolios: similar to equity ETFs, with different tax regimes.

In a buy or rent simulator, people often choose a conservative taux_placement: for example 3% for a cautious profile, 4–5% for a balanced profile, up to 6–7% for a very dynamic profile willing to accept volatility.

1.2. The link between placement rate and inflation

In 2026, annual inflation in the euro area seems to be stabilising around 2–3%. What really matters for your wealth is the real return:

Real return ≈ Placement rate − Inflation

• If taux_placement = 3% and inflation = 2.5%, real return ≈ 0.5%.
• If taux_placement = 5% and inflation = 2.5%, real return ≈ 2.5%.

In a buy or rent decision, ignoring inflation distorts the comparison: a 3% investment in a 0% inflation world is very different from 3% when inflation runs at 3%.

2. How taux_placement shapes the buy or rent calculation

The buy-or-rent.net / acheter-ou-louer.com simulator compares two paths:

• Buy scenario: you pay a down payment, notary fees (7–8% on existing properties, 2–3% on new build), agency fees (3–5%), a mortgage at around 3.6%, plus borrower insurance (~0.25–0.45%), property tax (from €450 to over €5,000 per year, regularly reassessed), and maintenance / renovation.
• Rent scenario: you pay rent that increases every year (linked to the IRL index in France), but you keep your down payment and the monthly difference versus buying, and you can invest all that at the taux_placement you choose.

The placement rate acts on the Rent scenario: the higher it is, the faster the tenant’s financial assets grow.

2.1. A simple 20‑year numerical example

Realistic 2026 assumptions:

• Purchase price: €300,000 (existing property).
• Down payment: €60,000.
• Loan: €240,000 over 20 years at 3.6% + insurance 0.3%.
• Current rent: €1,100/month, annual rent increase: 2% (IRL index).
• Property tax: €1,200/year, increasing 3%/year.
• Annual inflation: 2.5%.

To keep it simple, assume:

• Monthly mortgage + insurance: ≈ €1,450.
• Rent in year 1: €1,100/month.

Initial monthly difference between buying and renting: 1,450 − 1,100 = €350/month in favour of renting (the tenant pays less at the start).

2.2. Tenant scenario with different placement rates

Assume the tenant:

• Invests the €60,000 down payment.
• Invests the monthly difference between mortgage and rent (on average €300/month over 20 years, as rent gradually catches up).

Over 20 years, the future value of a lump sum C invested at rate r is:

Future value ≈ C × (1 + r)²⁰ + compounded monthly contributions

a) taux_placement = 2% (very cautious profile)

• Down payment €60,000 at 2% for 20 years: 60,000 × (1.02)²⁰ ≈ €89,000.
• Monthly €300 contributions at 2%: roughly €88,000.

Tenant’s financial wealth ≈ €177,000 (before tax).

b) taux_placement = 4% (balanced profile)

• Down payment €60,000 at 4% for 20 years: 60,000 × (1.04)²⁰ ≈ €131,000.
• Monthly €300 contributions at 4%: about €110,000.

Tenant’s financial wealth ≈ €241,000.

c) taux_placement = 6% (dynamic profile)

• Down payment €60,000 at 6% for 20 years: 60,000 × (1.06)²⁰ ≈ €192,000.
• Monthly €300 contributions at 6%: about €140,000.

Tenant’s financial wealth ≈ €332,000.

Just by changing the placement rate from 2% to 6%, the tenant’s final wealth differs by more than €150,000. In any buy or rent comparison, this single parameter is decisive.

3. On the other side: what is the “return” on buying property in 2026?

To compare fairly, you need to estimate the future value of the home and the real total cost of buying.

3.1. Property appreciation

Assume:

• Purchase price: €300,000.
• Average property price growth: 1.5%/year (cautious 2026 assumption, with a quieter market after years of increases and higher mortgage rates).

Value after 20 years:

300,000 × (1.015)²⁰ ≈ €404,000.

This is the buyer’s gross property wealth, excluding energy upgrades and selling costs (agency fees, diagnostics, potential capital gains tax, etc.).

3.2. Full cost of buying

Over 20 years, the buyer faces:

• Mortgage interest at 3.6% on €240,000: roughly €93,000 interest (order of magnitude).
• Borrower insurance at 0.3%: around €15,000–20,000 over the term.
• Notary fees on an existing property (7.5% of €300,000): ≈ €22,500.
• Agency fees (e.g. 3.5%): ≈ €10,500 (sometimes included in the advertised price).
• Property tax: €1,200 in year 1, +3%/year → ≈ €34,000 over 20 years.
• Maintenance and works: at least 1% of the property price per year on average, i.e. €3,000/year → ≈ €60,000. Energy renovation (to improve DPE rating) can significantly increase this.

Very roughly, the “extra” cost beyond just repaying the €240,000 principal exceeds €220,000 (interest + insurance + notary + property tax + works + agency).

The buy or rent calculation then becomes: is it better to end up with:

• A property worth ≈ €404,000 (with the mortgage fully repaid).
• Or financial assets between €177,000 and €332,000 depending on the placement rate?

The answer depends heavily on future property prices and the investment returns from 2026 onwards that you actually achieve.

4. How to pick a realistic taux_placement in the simulator

The goal is not to predict the future precisely, but to test a range of coherent scenarios in the buy-or-rent.net / acheter-ou-louer.com simulator.

4.1. Three sample scenarios to test

• Cautious scenario (taux_placement = 2–3%)
  • Mostly guaranteed savings products (regulated accounts, conservative euro funds).
  • Suitable if you cannot tolerate stock market volatility.
• Balanced scenario (taux_placement = 3.5–4.5%)
  • Mix of euro funds + bond ETFs + some equity ETFs.
  • Moderate volatility over the long term.
• Dynamic scenario (taux_placement = 5–6.5%)
  • High allocation to global equity ETFs / stock funds.
  • Higher expected return, but large short‑term swings.

In the simulator, you can run several buy or rent tests, changing only taux_placement. You will see at which investment return level the Rent scenario starts to outperform or underperform the Buy scenario.

4.2. Common pitfalls

• Over‑optimism on returns: assuming a stable 8–10% every year is very optimistic. Recent years (e.g. 2022–2023) have reminded investors how volatile markets can be.
• Ignoring inflation: an investment at 3% in a 3% inflation world barely preserves your purchasing power.
• Forgetting taxes: a 30% flat tax on interest and capital gains (outside tax‑advantaged wrappers) can materially reduce your net return.
• Overestimating your discipline: will you really invest the monthly difference between rent and mortgage every single month for 20 years?

5. Buy or rent in 2026: placement rate is key, but not the only driver

While taux_placement is crucial, other simulator parameters can weigh heavily on the outcome.

5.1. Mortgage rate and borrower insurance

With a loan rate around 3.6% in 2026 and borrower insurance at 0.25–0.45%, the effective cost of borrowing often approaches 4%. If your placement rate is significantly lower than that (say 2%), buying tends to look better financially, all else equal. If your expected taux_placement is higher (5–6%), staying a tenant and investing may look more attractive on paper.

5.2. Property tax and its upward reassessment

In some cities, property tax has risen by more than 20% in just a few years. The simulator lets you specify the annual increase in property tax. A 3–4% yearly rise over 20 years adds up to tens of thousands of euros. Tenants do not pay this tax directly, which can strengthen the case for investing spare cash instead.

5.3. Renovation costs and energy performance

With stricter energy performance rules and penalties for inefficient homes, renovation costs can be substantial over 10–20 years (insulation, heating, windows, etc.). In a buy or rent calculation, you should factor in at least 1% of the property price per year in maintenance, and more for old or poorly rated homes. If you stay a tenant, part of that money can be invested at your placement rate instead.

6. A full example: how placement rate shifts the 20‑year outcome

Let’s summarise the base case and compare the two paths in a simplified way.

6.1. Summary of assumptions

• Purchase price: €300,000.
• Value after 20 years: €404,000.
• Additional buying costs (interest, insurance, notary, property tax, works, agency): €220,000.
• Tenant’s wealth: between €177,000 and €332,000 depending on taux_placement.

6.2. Very rough comparison

• Buyer: gross property wealth ≈ €404,000.
• Cautious tenant (2%): ≈ €177,000 in financial assets.
• Balanced tenant (4%): ≈ €241,000 in financial assets.
• Dynamic tenant (6%): ≈ €332,000 in financial assets.

To be fully accurate, you would also need to account for:

• The exact breakdown between principal and interest on the mortgage.
• Taxes on investment income and capital gains.
• Transaction costs when selling the property (agency, potential capital gains tax).
• Rents saved by the owner once the mortgage is fully repaid.

Even with these simplifications, it is clear that investment returns from 2026 onwards can create or close a gap of more than €150,000 between buying and renting.

7. Conclusion: the “right” placement rate depends on you

In 2026, the buy or rent decision is no longer driven only by mortgage rates. The taux_placement you plug into the simulator has a major impact on the projected outcome:

• With low investment returns (2–3%), property can remain competitive despite notary fees, property tax and renovation costs.
• With medium to high returns (4–6%), remaining a tenant and investing the savings consistently can be very powerful.

The best placement rate assumption depends on your risk tolerance, your investment discipline, your time horizon and your personal situation. This article is for information only and does not constitute personalised financial advice.

To see precisely how the placement rate affects your own numbers, and to compare several investment return scenarios for 2026 and beyond, use the dedicated parameter in the simulator and run multiple tests.

Simulate your situation on buy-or-rent.net