How to use the Rent vs Buy Calculator
- 1 Enter the property price, deposit and buying costs.
- 2 Enter the loan rate and the weekly rent for a similar home.
- 3 Enter how many years to compare.
- 4 Set property growth, investment return and ownership costs.
Worked example
An $800,000 home with a $160,000 deposit and $35,000 of costs, compared with renting for $650 a week over 10 years. With 4% growth, home equity reaches about $650,000. Renting and investing at 6% grows to about $584,000, so buying is ahead by about $66,000.
Features
Home equity
Property value less the loan left.
Renter's investments
Deposit and savings invested instead.
Rising rent
Rent increases by 3% a year.
Ownership costs
Council rates, insurance and maintenance.
When to use it
First home buyers
Decide whether to buy now.
Moving cities
Compare buying and renting for a short stay.
Investing
Test different growth and return assumptions.
Upgrading
Compare a bigger home with renting.
Frequently asked questions
Is it better to rent or buy in Australia?
It depends on prices, rents, interest rates, how long you stay and how the money you would otherwise spend is invested. Buying tends to win over longer periods if property grows steadily.
What does this calculator assume?
That the renter invests the deposit and buying costs, plus any monthly saving compared with owning, at the return you choose.
What are the costs of buying?
Stamp duty, legal and conveyancing fees, inspections, loan fees and sometimes lenders mortgage insurance.
What are ongoing ownership costs?
Council rates, water rates, building insurance, strata levies and maintenance, often around 1% of the property's value a year.
Does it include selling costs?
No. Agent fees and marketing when you sell would reduce the buying result.
What about the main residence CGT exemption?
Your home is usually exempt from capital gains tax, while investment returns may be taxed. This calculator ignores tax.
Are first home buyer schemes included?
No. Stamp duty concessions and the Home Guarantee Scheme can reduce buying costs. Enter lower buying costs if you qualify.
What growth rate should I use?
Long-run averages vary widely by city. Try a few rates to see how sensitive the result is.
Is renting dead money?
Not necessarily. Renting gives flexibility, and invested savings can grow strongly.
Should I just buy as soon as possible?
Buying only makes sense when the repayments are affordable and you plan to stay for several years.
How do interest rates change the answer?
Higher rates raise the cost of owning, which often favours renting and investing in the short term.
Results are estimates based on the official rates linked above. Confirm important figures with the issuing authority or a qualified adviser before you act on them.
Reviewed by ToolsUnlocked Team · Last updated