Disclaimer: This calculator provides estimates only and should not be considered financial or tax advice. Always consult with a qualified tax professional or accountant before making investment decisions. This tool does not constitute advice from the Australian Taxation Office.
Rent vs buy calculator inputs and results
Buying Scenario
Enter deposit or LVR. Both fields update each other.
Conveyancing, building inspection, lender fees, etc.
Council rates, insurance, maintenance. Excludes mortgage repayments.
Renting Scenario
If you rent instead of buying, your deposit stays invested. This is the assumed annual return on that money.
Renter invested amount
Deposit + stamp duty + upfront costs = $179,250
The renter keeps all money the buyer spends upfront and invests it at the assumed return rate. This is the opportunity cost of buying.
Portfolio value at year 10: $352,612
Break-even at year 7
With the assumptions you entered, the buying scenario overtakes the renting scenario at year 7. Net wealth difference at year 10: $81,097.
Buyer net wealth (yr 10)
$37k
Renter net wealth (yr 10)
-$44k
Break-even point
Year 7
First year buyer net wealth equals or exceeds renter net wealth
Weekly cost: Buy vs Rent
$1,029
vs $650/wk rent (mortgage + ownership costs)
Net Wealth Over Time
Buyer: property equity minus all non-equity costs. Renter: invested portfolio value minus cumulative rent.
Amber line marks the break-even crossover at year 7.
Key Figures Used
| Year | Property value | Loan balance | Buyer equity | Buyer net wealth | Renter savings | Renter net wealth | Difference (Buy minus Rent) |
|---|---|---|---|---|---|---|---|
| 1 | $780,000 | $593,294 | $186,706 | $103,947 | $191,798 | $157,998 | -$54,050 |
| 2 | $811,200 | $586,138 | $225,062 | $88,794 | $205,223 | $136,440 | -$47,646 |
| 3 | $843,648 | $578,503 | $265,145 | $75,368 | $219,589 | $114,599 | -$39,231 |
| 5 | $912,490 | $561,666 | $350,824 | $54,029 | $251,407 | $70,156 | -$16,127 |
| 7 | $986,949 | $542,497 | $444,451 | $40,639 | $287,836 | $24,892 | +$15,747 |
| 10 | $1,110,183 | $508,657 | $601,526 | $37,187 | $352,612 | -$43,909 | +$81,097 |
Net wealth excludes land tax and capital gains tax. Assumes constant ownership costs and does not model future interest rate changes.
Renting versus buying a home in Australia
The choice between renting and buying is partly financial and partly personal. On the financial side, buying builds equity over time but comes with large upfront and ongoing costs, while renting keeps your money free to invest elsewhere. This calculator compares the two by projecting your wealth under each path over a time horizon you choose.
The buying path builds equity as you pay down the loan and as the property changes in value. The renting path assumes you invest the money you would have spent on a deposit and buying costs, plus any yearly difference in cost, so the two can be compared on the same footing. It is a model and general information, not financial advice, and the result depends heavily on the assumptions you enter.
How to use this calculator
Enter the property and rent details
Add the purchase price, your deposit, the loan rate and term, and the rent for a similar home.
Set the growth and return assumptions
Enter expected property growth, rent increases, and the return on money invested while renting.
Add the costs
Include upfront buying costs such as stamp duty, and ongoing costs such as rates, insurance and maintenance.
Choose the time horizon
Set how many years to compare. The calculator shows the wealth under each path and where they cross over.
How this calculator works
The calculator projects two paths year by year. On the buying path, it tracks your loan balance as you make repayments, applies your property growth assumption to the value, and subtracts ownership costs, to estimate your equity over time. On the renting path, it invests your deposit and buying costs at the return you set, adds any yearly saving from renting rather than owning, and grows that balance, to estimate your investment wealth over time. It then compares the two and marks the year they cross over.
Assumptions used
Assumptions used: the comparison invests the money not spent on buying, so it measures wealth, not just cost. Buying costs include the deposit and upfront costs such as stamp duty, and if the deposit is under 20% of the value, lenders mortgage insurance may apply. Ongoing ownership costs such as council rates, insurance and maintenance are estimated from your inputs. A main residence is generally exempt from capital gains tax, while returns on money invested while renting are usually taxable. Growth rates, rents and returns are your assumptions and are not guaranteed. The estimate is general information, not financial advice.
Worked example
A buyer purchases a $700,000 home with a $140,000 deposit and borrows the rest, while a renter pays rent on a similar home and invests the $140,000 deposit plus buying costs. Both paths are projected over 10 years.
Whether buying or renting comes out ahead depends on the assumptions. Higher property growth favours buying, while a higher investment return and lower property growth favour renting. The calculator shows the crossover year for the figures you enter, rather than a single answer.
Small changes in growth and return assumptions can flip the result over a long horizon, so it is worth testing a range.
What tips the rent versus buy result
Several assumptions shift the balance between the renting and buying paths. The main ones are:
Property growth
The rate the home is assumed to grow in value has a large effect on the buying path over a long horizon.
Investment return
The return on money invested while renting drives the renting path. A higher return favours renting.
Time horizon
Buying tends to look stronger the longer you hold, because upfront costs are spread over more years.
Upfront buying costs
Stamp duty, legal fees and, for deposits under 20%, lenders mortgage insurance add to the cost of buying.
Ongoing ownership costs
Council rates, insurance, maintenance and any strata fees reduce the return from owning.
Tax treatment
A main residence is generally exempt from capital gains tax, while returns on investments are usually taxable.
Rates and assumptions used
| Item | Value used | Source |
|---|---|---|
| Lenders mortgage insurance threshold | Usually applies when the deposit is under 20% of the property value | ASIC MoneySmart, Save for a house deposit |
| Upfront buying costs | Deposit plus costs such as stamp duty and legal fees | ASIC MoneySmart, Save for a house deposit |
| Main residence CGT exemption | A home is generally exempt from CGT if it was your main residence for the whole period and not used to produce income | ATO, Eligibility for main residence exemption |
| CGT on investments (current rules) | Investment gains are taxed at your marginal rate, with a 50% discount for assets held at least 12 months until 30 June 2027 | ATO, How to calculate your CGT |
| CGT change from 1 July 2027 | For individuals, the 50% discount on investment gains is replaced by cost base indexation and a 30% minimum tax rate | ATO, Reforming negative gearing and capital gains tax |
Figures checked against the sources above on 10 August 2026.
Frequently asked questions
There is no single answer. The outcome depends on property growth, the return you could earn by investing, the time horizon, and the costs of buying and owning. This calculator projects both paths from your assumptions and shows where they cross over.
Related calculators and guides
Sources
- •ASIC MoneySmart, Save for a house deposit
- •ATO, Eligibility for main residence exemption
- •ATO, How to calculate your CGT
- •ATO, Reforming negative gearing and capital gains tax
Content reviewed and figures checked against the sources above on 10 August 2026.