Rent vs Buy Calculator
See how buying a home compares to renting and investing the difference, in dollar terms, over the time frame you're actually planning for.
Your details
After 10 years, buying comes out ahead by
$24,680
Buyer's equity
$671,586
Renter's invested portfolio
$646,906
Property value at year 10
$1,140,226
Assumes the renter invests the deposit, upfront buying costs, and any monthly saving from renting being cheaper than owning. If owning is cheaper than renting in a given month, that difference is assumed spent rather than invested by the buyer. Doesn't model stamp duty concessions, selling costs, negative gearing or capital gains tax, or rent assistance. This tool provides estimates only and is not financial advice, the right choice depends on more than just the numbers.
How to use this calculator
- 1. Enter the property price, your deposit, upfront buying costs, interest rate and loan term.
- 2. Enter what it would cost to rent a comparable property, and how you expect rent and property values to grow.
- 3. Enter the return you'd expect if you invested the deposit and any monthly saving instead of buying.
- 4. See the buyer's home equity versus the renter's invested portfolio after your chosen time horizon.
Why this isn't just a repayments-versus-rent comparison
A lot of rent-versus-buy comparisons just look at whether the mortgage repayment is bigger than the rent, which misses the bigger picture. Buying ties up a deposit (and ongoing loan repayments) that could otherwise be invested elsewhere, but it also builds equity in an appreciating asset and, once the loan's paid off, removes housing costs almost entirely. Renting keeps your deposit liquid and invested, and if renting is cheaper month to month, that gap can be invested too, but rent has no ceiling and you build no equity from it. This calculator tries to capture both sides by tracking actual net wealth under each path, not just cash flow.
Why the assumptions matter more than the maths
The maths here is straightforward once the inputs are set, but the answer is extremely sensitive to three assumptions: how fast property values grow, how fast rent grows, and what return you could realistically get investing instead. Small changes to any of these can flip the result entirely, which is exactly why you shouldn't treat this calculator's output as a prediction. It's a way to see how the comparison changes as you adjust realistic ranges for each input, and to understand which assumptions the decision actually hinges on for your situation.
FAQ
Does this account for the lifestyle value of owning your own home?
No, this is purely a financial comparison. Owning has non-financial value for a lot of people, stability, the ability to renovate, not depending on a landlord, that this calculator doesn't and can't capture. The right decision often isn't purely the one with the bigger number.
What return should I use for the 'investment return if renting' figure?
This should reflect what you'd realistically earn investing the deposit and any monthly saving, commonly a diversified share portfolio, which has historically averaged around 7-9% per year over the long term in Australia, though this isn't guaranteed and includes real volatility year to year.
Why does the result change so much if I adjust the time horizon?
Longer horizons generally favour buying, since more of the loan gets paid off (building equity even without any capital growth) and the fixed nature of a mortgage repayment becomes relatively cheaper compared to rent, which keeps rising. Shorter horizons often favour renting, since upfront buying costs (stamp duty, legal fees) haven't been 'worn down' by enough years of ownership yet.
Does this include stamp duty?
You enter it manually as 'Upfront Buying Costs'. Use our stamp duty calculator to get an accurate figure for your state and situation, then add legal and inspection fees on top, a rough estimate is often 4-5% of the property price in total.
Is buying always better if property values keep rising?
Not necessarily, it depends on how that growth compares to what your invested deposit could have earned instead, and how the ongoing costs compare. Property growth alone doesn't guarantee buying wins, that's exactly what this calculator is trying to help you see for your own numbers rather than assume.
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Disclaimer
Assumes the renter invests the deposit, upfront buying costs, and any monthly saving from renting being cheaper than owning, and that a difference in favour of the buyer in any month is simply spent rather than invested. Doesn't model stamp duty concessions, selling costs, negative gearing tax benefits, capital gains tax, or rent assistance. Property and investment returns are not guaranteed and can go down as well as up. This tool provides estimates only, is not financial advice, and the right decision depends on more than the numbers alone.