Calculators
Rent vs buy calculator
Renting isn't dead money and buying isn't automatically smart — it depends on prices, rents, growth and how long you stay. This compares net wealth on both paths year by year, and tells you the year buying pulls ahead.
Buying
$150,000. Mortgage insurance isn't included — see the LMI calculator.
Sets the transfer duty in the purchase costs.
On top of $22,334 of duty and registration fees.
Renting
What a comparable place costs to rent.
Your assumption — set it to 0 to hold rent flat.
What the renter earns on the deposit and the cash-flow difference, before tax. Your assumption.
Owning costs & growth
Your assumption. Past growth is no guide — try a pessimistic figure too.
Of the property's value each year — about $3,750 to begin with.
Agent commission and legals, deducted from the property's value so both sides are compared after costs.
Buying is ahead by
$86,742
After 10 years, on your assumptions. Buying pulls ahead in year 5. Everything hinges on the growth and return figures, which nobody can know.
Buying: net position at year 10
$580,314
Renting: net position at year 10
$493,572
Break-even
The first year buying pulls ahead
Year 5
Cash buying needs on day one
$150,000 deposit plus $25,634 of costs
$175,634
Monthly repayment
On a $600,000 loan at 6.0% over 30 years
$3,597.30
Year one: cost of owning
Repayments plus rates, insurance and maintenance
$51,118
Year one: cost of renting
$650 a week
$33,800
Rent paid over 10 years
$387,479
Interest paid over 10 years
$333,791
Rates, insurance & upkeep over 10 years
$87,023
Email me these resultsPlus a quick note on what a lender would actually do with them.
Net position: buying vs renting over 10 years
- Buying
- Renting
Buying = the property's value less selling costs and the loan balance. Renting = the deposit and purchase costs invested at 6.0%, plus every year the renter spends less on housing than the owner would. The chart floors at zero; the table below shows any negative figures in full.
Year-by-year comparisonNet position each year, plus what the property is worth and what rent costs by then.
| Year | Property value | Loan owing | Rent that year | Buying: net | Renting: net |
|---|---|---|---|---|---|
| 1 | $780,000 | $592,632 | $33,800 | $167,868 | $203,490 |
| 2 | $811,200 | $584,809 | $34,814 | $206,111 | $232,153 |
| 3 | $843,648 | $576,504 | $35,858 | $246,052 | $261,647 |
| 4 | $877,394 | $567,687 | $36,934 | $287,772 | $291,998 |
| 5break-even | $912,490 | $558,326 | $38,042 | $331,351 | $323,230 |
| 6 | $948,989 | $548,388 | $39,183 | $376,877 | $355,370 |
| 7 | $986,949 | $537,836 | $40,359 | $424,439 | $388,446 |
| 8 | $1,026,427 | $526,634 | $41,570 | $474,132 | $422,486 |
| 9 | $1,067,484 | $514,741 | $42,817 | $526,056 | $457,518 |
| 10 | $1,110,183 | $502,114 | $44,101 | $580,314 | $493,572 |
Under the bonnet
Assumptions & how we calculate
We show our working so you can judge the number, not just read it. Every lender applies its own policy on top of maths like this.
- Buying: a principal & interest loan at a fixed rate for the whole term, plus rates, insurance and body corporate as an annual figure, plus maintenance as a percentage of the property's value each year.
- Purchase costs use the selected state's transfer duty scale with the concession for the buyer type, plus transfer and mortgage registration, plus an estimate of legal, inspection and loan fees. Lenders mortgage insurance is not included.
- Renting: the weekly rent grows at the chosen rate every year, and the renter starts with the buyer's deposit and purchase costs invested at the chosen return.
- Each year, whichever path costs less in housing has the difference added to that side's portfolio, and both portfolios compound at the investment return.
- The buyer's net position is the property's value less selling costs and the loan balance, so both sides are compared after the cost of getting out.
- Capital growth, rent increases and investment returns are all assumptions — nothing here is a forecast. Tax on investment returns, negative gearing and capital gains tax are not modelled.
The information on this website is general in nature and does not take into account your personal objectives, financial situation or needs. Before acting on any information you should consider whether it is appropriate for you. Terms, conditions, fees, charges and normal lending criteria apply. Rates are subject to change.
FAQs
Questions people ask
What does the break-even year actually mean?
It is the first year in which the buyer's net position overtakes the renter's. The buyer's position is the property's value, less selling costs and the loan balance. The renter's is the portfolio they built by investing the deposit and purchase costs on day one, plus every year they spent less on housing than the owner did. Before break-even, renting and investing leaves you ahead on paper; after it, buying does.
Why does renting come out ahead in the early years?
Because buying front-loads its costs. Transfer duty, conveyancing and loan fees are gone the moment you settle, the first years of repayments are almost all interest, and selling costs are deducted whenever you exit. The renter meanwhile has the whole deposit compounding from day one. Capital growth takes time to overcome that head start — which is why a short holding period is the single biggest risk in buying.
Which assumptions matter most?
Capital growth and the investment return, by a wide margin, followed by how long you hold. A one percentage point change in either can flip the answer over ten years. Nobody knows the real figures, so the honest way to use this is to run a pessimistic set and an optimistic set and see whether the conclusion survives both.
Does this include tax, negative gearing or capital gains tax?
No. Investment returns are shown before tax, so a renter's real after-tax portfolio would be smaller. Against that, an owner-occupier's capital gain is generally exempt from capital gains tax while an investor's is not, and negative gearing is not modelled at all. If tax is central to your decision, it needs an accountant rather than a calculator.
Is buying always the better long-term decision?
Not automatically. Over long holding periods a leveraged, capital gains tax-exempt home has usually done well in Australia, and there is real value in security of tenure that no spreadsheet captures. But if you might move within a few years, if the purchase stretches you to the point of fragility, or if rents in your area are unusually cheap relative to prices, the numbers can genuinely favour renting.
Next step
Numbers looking good? Let's turn them into a pre-approval.
A calculator can't read a payslip or a lender's policy. Sachin can — book a free call and we'll check these numbers against 70+ lenders, then tell you what's actually possible.
Free, no obligation. General information only — not credit advice.