Compare the true long-term cost of renting vs buying a home in Australia, including opportunity cost of the deposit, transaction costs, ongoing ownership costs, and capital growth.
📖 18 min read · ⏱️ Calculator time: ~1 minute
| Metric | Buy | Rent & Invest |
|---|
Results are estimates only, based on the assumptions you enter. Actual outcomes depend on real property and investment market performance, which cannot be predicted.
See how the result changes under different growth, rate and inflation assumptions.
| Year | Property value | Loan balance | Buy net wealth | Rent net wealth |
|---|
This is one of the biggest financial decisions Australians make. The maths depends heavily on your time horizon, local property growth, and investment returns. For stays under 5 years, renting often wins due to high transaction costs (~5% of property value for stamp duty, conveyancing, and agents). For longer horizons in growth markets, buying typically comes ahead.
This is one of the biggest financial decisions Australians make, and the honest answer is: it depends. The maths depends heavily on your time horizon, local property growth, investment returns, and how long you plan to stay. For stays under 5 years, renting often wins financially due to high transaction costs (3-5% of property value for stamp duty, conveyancing, and agents). For longer horizons in growth markets, buying typically comes ahead — though as the calculator above shows, this isn't guaranteed, since it depends heavily on how property growth compares to the returns you could earn investing the equivalent capital elsewhere.
Beyond the deposit and mortgage repayments, ownership carries ongoing costs many first-time buyers underestimate: council rates, water rates, home and contents insurance, regular maintenance and repairs, and (for units or townhouses) body corporate or strata fees. The calculator above lets you enter each of these separately so they're properly reflected in your comparison, rather than folded into a single rough estimate.
Renting isn't cost-free either: bond (typically 4 weeks' rent, refundable), moving costs each time you relocate, contents insurance (your landlord's insurance doesn't cover your belongings), and the risk of above-inflation rent increases at each lease renewal. Use the Future Rent Increase Simulator in our dedicated Rent Affordability Calculator to model this risk more precisely.
If you don't buy, your deposit and buying costs don't disappear — they can be invested. The rent-vs-buy comparison only makes sense when you account for what that capital would earn in alternative investments. The calculator above invests the full amount you would have spent on a deposit, stamp duty, LMI and other buying costs from day one of the rent scenario, then continues investing the ongoing "saving" whenever renting costs less than owning that month. Over 10+ years, this opportunity cost compounds significantly — which is exactly why the Investment Return assumption matters as much as the Property Growth assumption to your final result.
Property growth is the single biggest driver of the "buy" side of this comparison, since it applies to the full property value — not just your deposit — thanks to leverage. A 4% annual growth rate on an $800,000 property adds $32,000 in the first year alone, even though you may have only put down $160,000. This leverage cuts both ways: in a flat or falling market, the same effect works against you, and your losses (as a percentage of your deposit) can be much larger than the percentage fall in the property's value.
The "rent and invest" side of the comparison depends heavily on your assumed investment return, which historically has varied significantly by asset allocation — cash and term deposits return much less than a diversified share portfolio over the long term, but with correspondingly less volatility. Use the Sensitivity Analysis panel in the calculator above to see how the result shifts if your actual investment returns come in higher or lower than assumed — a genuinely important check, since small differences compound enormously over a 10-30 year horizon.
The break-even year is the point at which buying's net wealth first overtakes renting-and-investing's net wealth, given your assumptions. Before this point, renting and investing the difference leaves you financially ahead; after it, buying does. The Break-Even Analysis panel in the calculator above calculates this directly from your inputs — shorter horizons than your break-even year favour renting financially, even if buying eventually wins over a longer stay.
If you're weighing renting against buying as a first home buyer, several government schemes can significantly change the buying side of this comparison: the Australian Government 5% Deposit Scheme (formerly the First Home Guarantee) lets eligible buyers purchase with a 5% deposit and no LMI, potentially reducing your required buying capital substantially. Stamp duty concessions in most states can also reduce or eliminate the stamp duty figure in the calculator above. See our dedicated Home Deposit Calculator for a full breakdown of scheme eligibility and savings.
Try these scenarios in the calculator above to see how different circumstances change the outcome:
| Scenario | Key assumption | Typical lean |
|---|---|---|
| First home buyer | $600k property, 10% deposit, 10-year horizon | Close — depends heavily on growth vs investment return |
| Family upsizing | $900k property, 20% deposit, 15-year horizon | Buying, if staying long-term |
| Investor comparison | Same property, evaluating leveraged growth vs direct investing | Depends on gearing and growth assumptions |
| High interest rate | Mortgage rate 8%+ | Favours renting more than base case |
| Low interest rate | Mortgage rate 4-5% | Favours buying more than base case |
| Fast property growth | Growth 6-8% p.a. | Strongly favours buying |
| Slow property growth | Growth 1-2% p.a. | Strongly favours renting |
| Long-term (30 years) | Full loan term horizon | Highly sensitive to the growth-vs-investment-return gap |
Enter each of these assumption sets into the calculator above (adjusting price, deposit, rate, growth and horizon) to see the exact dollar outcome for your own numbers.
| Term | Meaning |
|---|---|
| Net wealth | Total assets (property equity or investment balance) after accounting for costs like selling fees. |
| Opportunity cost | What your capital would have earned if invested elsewhere instead of used as a deposit. |
| Break-even year | The year buying's net wealth first overtakes renting-and-investing's net wealth. |
| Leverage | Using borrowed money (a mortgage) to gain exposure to an asset larger than your own capital. |
| Equity | Property value minus outstanding loan balance. |
| Selling costs | Agent commission and other costs incurred when selling a property, typically 2-3%. |
What makes this comparison genuinely complicated is the upfront transaction cost of buying. Stamp duty, conveyancing, inspections, and mortgage setup typically add 3-5% to the purchase price — money you don't recover unless the property grows in value by at least that amount first. This is why short time horizons strongly favour renting: if you buy and sell within 3 years, transaction costs on both ends often wipe out any growth benefit. The calculator above lets you enter your own stamp duty, LMI and other buying cost figures for an accurate picture.
This calculator gives you a financial comparison — it cannot account for lifestyle factors that matter just as much to most Australians: security of tenure, the ability to renovate, school zones, pet ownership, and the psychological benefit of owning your home. For most people, the decision to buy isn't purely financial. The calculator helps you understand what the numbers look like under different assumptions, not what you "should" do.
There is no universal answer — it depends on income, deposit, local price-to-rent ratios, planned length of stay, and personal priorities. The calculator compares financial outcomes under your specific assumptions.
Transaction costs (stamp duty, conveyancing, LMI) typically require 3–5 years of ownership for capital growth and equity to offset them. Buying and selling within 2–3 years often results in a net loss even in a flat market.
Investing a $100,000 deposit at 7% p.a. grows to approximately $387,000 over 20 years. Buying provides leveraged property exposure instead. The calculator accounts for this investment alternative in its comparison.
It's the point at which buying's net wealth first overtakes renting-and-investing's net wealth under your assumptions. Before this year, renting and investing the difference leaves you financially ahead; after it, buying does.
Yes — enter your own stamp duty figure (or use our dedicated Stamp Duty Calculator to work it out for your state and situation) and it's included as an upfront buying cost, invested instead in the rent scenario.
Yes, there's an optional LMI field — enter your estimated LMI if your deposit is below 20% of the property value, and it will be included as an upfront buying cost.
Maintenance, council rates, water rates, home insurance, and body corporate/strata fees (if applicable) — each entered separately for an accurate picture, and inflated annually using your entered inflation rate.
Yes — enter your expected selling costs (typically 2-3% of sale price for agent commission and other fees), and they're subtracted from the property's value when calculating your final net wealth if sold at the end of your time horizon.
Whatever you enter in the Loan Term field, independent of your comparison Time Horizon — so a 30-year loan compared over a 40-year horizon correctly shows the mortgage fully repaid at year 30, with no more mortgage payments for the remaining 10 years.
The calculator correctly stops the mortgage once it's fully repaid and continues tracking only ongoing ownership costs (rates, insurance, maintenance) for the remainder of the horizon — this is a genuine calculation, not an approximation.
It invests the full amount you would have spent on a deposit, stamp duty, LMI and other buying costs from day one, then continues investing the difference each month whenever buying's total monthly outgoing (mortgage plus ongoing costs) exceeds your rent.
This depends on your actual asset allocation — cash and term deposits historically return less than a diversified share portfolio, with correspondingly less risk. Use the Sensitivity Analysis panel above to see how your result changes across different assumptions.
This varies significantly by location and time period — check recent local data for your target area rather than relying on a single national average, and test both higher and lower growth scenarios using the Sensitivity Analysis panel.
Not necessarily — it depends on the gap between your property growth assumption and your investment return assumption. If investment returns significantly exceed property growth over the long run, renting and investing can outperform even over 30-40 years.
Between stamp duty, buying costs, and selling costs, round-trip transaction costs commonly total 5-8% of the property's value — which is why short ownership periods strongly favour renting financially.
Not necessarily every year, but rent increases have been common in recent years due to low vacancy rates in most capital cities. Enter your own expected annual rent increase assumption in the calculator above — see our Rent Affordability Calculator for a dedicated rent increase simulator.
Yes — as your loan balance falls with each repayment, less of each subsequent repayment goes to interest and more goes to principal, which is why the calculator tracks interest and principal separately rather than assuming a flat split.
For buying, it's your property equity minus selling costs (what you'd walk away with if sold at your time horizon). For renting, it's your investment balance (fully liquid, no selling costs needed since it's not being "sold").
No — the investment return entered is assumed to be a net figure. If you'd be paying capital gains tax or income tax on investment earnings, consider using a lower after-tax return assumption. This calculator provides general information only, not tax advice.
No — this calculator models an owner-occupied purchase, not an investment property, so negative gearing and rental-related deductions aren't included. See our related guide on negative gearing for investment property specific considerations.
It uses a proper month-by-month amortisation and compounding engine (not simplified annual approximations) and has been tested against manual calculations. Your actual outcome depends on real property and investment market performance, which cannot be predicted with certainty.
It's designed for an owner-occupier decision (comparing your own housing cost). For an investment property, additional factors like negative gearing, depreciation and rental income would need separate consideration.
Set your Time Horizon to your expected ownership period rather than your full loan term — the calculator will correctly show your equity position (property value minus remaining loan balance) at that point.
Not automatically — a bigger deposit reduces your mortgage interest but also reduces the capital available to invest in the rent scenario, so the net effect depends on how your mortgage rate compares to your investment return assumption.
The calculator inflates ongoing ownership costs (rates, insurance, maintenance) annually by your entered inflation rate — higher inflation increases the buy side's ongoing costs, generally favouring renting slightly, all else equal.
This depends on whether property prices are likely to rise faster than you can save in the meantime — a question our Home Deposit Calculator's Growth-Adjusted Savings Goal can help you model directly.
No — as the calculator above demonstrates, this depends entirely on your specific assumptions. A slow property growth market combined with strong investment returns can make renting-and-investing the better financial outcome, even over long horizons.
Leverage means gaining exposure to an asset (the full property value) using borrowed money (the mortgage) while only contributing a fraction (the deposit). It amplifies both gains and losses relative to your own capital, which is a key reason property growth has an outsized effect on the buy scenario.
Yes — run the calculator twice with different property prices, growth assumptions and (if relevant) body corporate/strata fees to compare the two options directly.
Not automatically — but you can model it by setting your deposit to 5% and your LMI to $0 (since the scheme waives LMI for eligible buyers), then check eligibility separately with our Home Deposit Calculator.
A higher rate increases your monthly mortgage cost and total interest paid, generally favouring renting; a lower rate reduces the cost of buying, generally favouring buying — see the Sensitivity Analysis panel above for the exact effect on your numbers.
Your equity falls (or, in a large enough fall, could go negative if your loan balance exceeds the property's value) — test a low or negative growth rate in the calculator above to see this risk quantified for your specific numbers.
This varies significantly by city and even suburb — price-to-rent ratios differ substantially across Australian capitals. Use our Rent Affordability Calculator's median rent comparison alongside this calculator's property price input for a location-specific view.
The core comparison uses monthly repayments for consistency. For a detailed weekly/fortnightly repayment comparison, see our dedicated Mortgage Calculator.
A mortgage calculator shows your repayment and interest cost in isolation. This calculator compares that cost (plus all ownership costs) against the alternative of renting and investing the equivalent capital — a genuinely different question.
Yes — run the calculator separately for each property's price, and compare the resulting net wealth figures alongside your personal preferences for each option.
No — it compares buying now against renting-and-investing for the same time horizon, starting from your entered deposit amount. Use our Home Deposit Calculator to separately model the saving period before you'd be ready to buy.
This varies enormously by period and location — there's no single "correct" figure. Check recent CoreLogic or Domain data for your specific target area, and always test a range of assumptions rather than relying on one number.
Yes — the Annual Comparison Table and the Net Wealth chart above show property value, loan balance, and both scenarios' net wealth for every year of your time horizon.
Yes — use the CSV button for the full year-by-year data, the PDF button for a summary report, or Print/Copy for quick reference.
Not directly through the rent itself, but the "rent and invest" strategy modelled by this calculator builds wealth through the invested capital that would otherwise have gone into a deposit and ownership costs.
The gap between your property growth assumption and your investment return assumption typically matters more than any other single input — small changes to either compound enormously over a 10-30 year horizon.
This is a personal decision that combines financial and lifestyle factors — the calculator above gives you the financial picture under your own assumptions, but security of tenure, stability, and personal preference matter too. See "What the Calculator Can and Can't Tell You" above.
Yes — simply enter your local property price, rent, and growth assumptions; the calculator's engine isn't location-specific, so it applies equally to regional and metropolitan markets.
Whenever your circumstances or key assumptions change materially — a different property price, a rate change, or an updated view on local growth or investment returns — since the result is highly sensitive to these inputs.