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AussieCalc

Rent vs Buy Calculator Australia

Compare the long-term cost of renting versus buying a property in Australia. See total rent paid, mortgage repayments, and property value over your chosen timeframe.

When to use

When you're weighing whether to buy a property or keep renting, and want to compare the true 10–30 year financial cost of each path.

Who it's for

Aspiring first home buyers and long-term renters deciding whether purchasing a home makes financial sense in their situation.

What you'll need

Property price (or monthly rent), deposit amount, home loan rate, expected property growth, and investment return if you stayed renting.

$

Current or expected monthly rent for a comparable property.

$

Purchase price of the property you are considering buying.

$

LVR = loan ÷ property price. Below 20% deposit (LVR above 80%) will require Lenders Mortgage Insurance (LMI).

%

Annual interest rate on your home loan. Current variable rates are approximately 6–7% p.a.

The comparison period. 30 years is the standard Australian home loan term, though many owners repay faster.

%

Expected annual property price growth. Australian capitals averaged ~6% (1990–2020); conservative assumption is 3–4%.

%

Expected annual rent increase. Roughly in line with CPI — recently higher in tight rental markets.

Simplified model: P&I repayments, stamp duty estimated at ~4% of purchase price. Excludes ongoing ownership costs (council rates, insurance, maintenance), selling costs, and deposit opportunity cost. General guidance only — not financial advice.

Saved scenarios

No saved scenarios yet. Adjust inputs and click “Save current” to compare later.

Net equity vs cumulative rent

30-year comparison — hover to inspect each year

Net equity (buying)Cumulative rent paid
Line chart comparing net equity from buying versus cumulative rent paid over 30 years
PeriodNet equityCumulative rent
Yr 1$199K$30K
Yr 2$240K$61K
Yr 3$283K$93K
Yr 4$327K$126K
Yr 5$374K$161K
Yr 6$423K$197K
Yr 7$474K$233K
Yr 8$527K$272K
Yr 9$583K$311K
Yr 10$642K$352K
Yr 11$703K$394K
Yr 12$766K$438K
Yr 13$833K$483K
Yr 14$903K$530K
Yr 15$976K$579K
Yr 16$1.1M$629K
Yr 17$1.1M$681K
Yr 18$1.2M$735K
Yr 19$1.3M$791K
Yr 20$1.4M$848K
Yr 21$1.5M$908K
Yr 22$1.6M$970K
Yr 23$1.7M$1.0M
Yr 24$1.8M$1.1M
Yr 25$1.9M$1.2M
Yr 26$2.0M$1.2M
Yr 27$2.2M$1.3M
Yr 28$2.3M$1.4M
Yr 29$2.4M$1.5M
Yr 30$2.6M$1.5M

Net equity = property value minus remaining mortgage balance. When the green line rises above orange, buying has generated more value than the total rent paid.

Renting vs buying in Australia — what you need to know

The Australian property market context

Australian residential property has historically been one of the strongest-performing asset classes, with capital city prices growing at approximately 6% p.a. over the 30 years to 2020, driven by population growth, restricted land supply near CBDs, and strong immigration. Sydney and Melbourne median dwelling prices now exceed $1 million, making the deposit hurdle significant. However, property growth is not guaranteed and has been negative in periods following rate rises. The rent vs buy decision depends heavily on the local market, your time horizon, and personal circumstances.

The real costs of buying

Beyond the deposit and mortgage repayments, buying a home involves substantial additional costs. Stamp duty alone can be $25,000–$50,000 on a median-priced home (varying by state; check your state revenue office). Conveyancing (the legal process of transferring property ownership, handled by a solicitor or licensed conveyancer) costs $1,500–$3,000. Building and pest inspections add $400–$800. Ongoing costs include council rates ($1,000–$3,000/yr), building insurance ($1,500–$3,000/yr), and maintenance, typically 1–1.5% of property value per year, higher for older homes. Strata/body corporate fees apply to apartments and can be substantial.

The real costs of renting

Renting offers flexibility and lower upfront costs, but rent payments build no equity and expose you to annual rent increases. Rents in Australian capital cities have risen sharply since 2022, with vacancy rates below 2% in Sydney and Melbourne pushing rents well above CPI. Renters also have less security of tenure, limited ability to modify the property, and may face restrictions on pets. The 'renting is dead money' narrative oversimplifies the comparison, but the true cost of each option depends on your local market, time horizon, and personal circumstances.

When renting makes more financial sense

If you plan to move within 3–5 years, the upfront costs of buying (stamp duty, conveyancing, agent's fees on sale) mean you would need significant capital growth just to break even. Renting also makes more sense in expensive markets with low rental yields: if a property yields 2% and a HISA pays 5%, the opportunity cost of a large deposit is material. Renters in Sydney's inner suburbs often pay far less monthly than a mortgage on the same property. The decision is not just financial; job flexibility, lifestyle, and family plans all factor in.

The opportunity cost of your deposit

A 20% deposit on an $800,000 property ties up $160,000 that could otherwise be invested. At historical Australian share market returns of approximately 9% per year, $160,000 grows to around $2.1 million over 30 years, not far below the terminal property value at 4% annual growth. But the renter still pays rent over those 30 years, so the net wealth comparison is closer than the gross figures suggest. Property also provides leverage (you control an $800,000 asset with $160,000 down), forced savings through principal reduction, and the main residence CGT exemption. The outcome depends heavily on which asset grows faster relative to your total housing costs over your specific time horizon.

Worked examples

$800,000 purchase over 30 years — standard scenario
With a $160,000 (20%) deposit, 6.5% interest rate, and 4% annual property growth, the monthly repayment is approximately $4,045. After 30 years the property reaches around $2.59 million. Total outlay (deposit, mortgage repayments, and stamp duty) comes to approximately $1.65 million, producing a net gain of roughly $945,000 above all costs. A renter paying $2,500 per month with 3.5% annual increases spends approximately $1.55 million over the same period with no asset to show for it. Long-term ownership produces a materially better financial outcome in this scenario, primarily because of compound property growth working on the full asset value.
The same property with a 5-year horizon
If you sell after 5 years, the picture changes significantly. After 60 monthly payments of $4,045, the loan balance is approximately $599,000, most early repayments cover interest rather than principal. At 4% annual growth the property is worth around $973,000, giving roughly $374,000 in net equity. But the total outlay in those 5 years (deposit + 60 mortgage payments + stamp duty) is around $435,000, and agent fees on sale add approximately $21,000. Total rent over 5 years, starting at $2,500 per month with 3.5% annual increases, comes to approximately $161,000. Stamp duty and early interest costs mean the short-term buyer pays substantially more than the renter while building only modest equity. Below a 7–10 year horizon, renting is typically the more cost-effective choice in most Australian markets.
High-growth market at 7% annual property growth
Historical Sydney and Melbourne capital growth has averaged roughly 7% per year over multi-decade periods. At 7% growth, an $800,000 property reaches approximately $6.1 million after 30 years, a net gain of around $4.4 million above total buying costs. This illustrates how property leverage (controlling an $800,000 asset with $160,000) amplifies long-run gains dramatically. However, past capital growth does not guarantee future performance: every Australian capital city has experienced periods of flat or negative prices following rate rises or economic downturns. Try the calculator at 3%, 5%, and 7% growth to see how sensitive your outcome is to this single assumption.

What buyers and renters often overlook

  • Forgetting ongoing ownership costs

    Council rates, insurance, water rates, and maintenance typically add $5,000–$15,000 per year to the true cost of ownership. A common rule of thumb is to budget 1–1.5% of property value annually for maintenance alone, $8,000–$12,000 per year on an $800,000 property.

  • Ignoring the opportunity cost of the deposit

    A 20% deposit is a large sum of capital. While it becomes equity immediately, that capital is illiquid and earns returns only as the property appreciates. Renters who invest their deposit in a diversified portfolio can accumulate significant wealth independently of the property market.

  • Treating property growth as guaranteed

    Australian property has grown strongly over long periods, but not in a straight line. Sydney prices fell roughly 15% from 2017 to 2019, and many regional markets have seen extended flat periods. The outcome of buying versus renting is highly sensitive to the growth rate assumption, a difference of 2% per year compounded over 30 years produces dramatically different results.

  • Underestimating transaction costs

    Stamp duty, conveyancing, building inspections, and loan establishment fees can total $40,000–$60,000 on a median-priced home before you make a single mortgage payment. When you sell, agent commissions (typically 2–2.5% of the sale price) and conveyancing add further costs. On a property that has grown to $1.5 million, agent fees alone could be $33,000–$37,500. These costs significantly affect the break-even period.

Frequently asked questions

Is it better to rent or buy in Australia?
It depends on the city, your time horizon, and personal finances. In most Australian capital cities, buying has historically produced better financial outcomes over 10+ year horizons due to capital growth and forced savings through mortgage repayments. However, when interest rates are elevated, monthly mortgage repayments on a median-priced home can significantly exceed rent on the same property; the break-even in some Sydney suburbs has historically required 5–7 years or more. For shorter horizons or uncertain circumstances, renting often makes more financial sense.
How much deposit do I need to buy a house in Australia?
Typically 20% of the purchase price to avoid Lenders Mortgage Insurance (LMI). On an $800,000 property that is $160,000, plus stamp duty ($25,000–$45,000 depending on state) and other costs. If you have less than 20%, LMI protects the lender and can cost $10,000–$30,000, though it can be added to the loan. The Australian Government 5% Deposit Scheme (formerly the First Home Guarantee) lets eligible first home buyers purchase with 5% deposit without LMI, with the government guaranteeing the remaining 15%.
What is the break-even point for buying vs renting in Australia?
Break-even is when the total cost of buying (mortgage + stamp duty + ongoing costs) equals the total cost of renting (rent payments) after accounting for equity built. In most Australian markets, this historically occurs within 5–10 years, after which buying tends to build significantly more wealth. In expensive markets with low rental yields, the break-even can extend to 7–12 years. This calculator simplifies the comparison; a full analysis should also include the deposit opportunity cost and ongoing ownership costs.
Does stamp duty significantly affect the rent vs buy decision?
Yes. Stamp duty is one of the largest upfront costs of buying and directly extends the break-even period. On an $800,000 property in NSW, stamp duty is approximately $31,500. In Victoria it is around $43,000. This money is spent before you make a single mortgage payment. It is also non-recoverable: unlike a deposit, you cannot sell the home and get stamp duty back. The ACT is progressively replacing stamp duty with an annual land tax, which reduces upfront costs but adds ongoing charges.
Should I use the Australian Government 5% Deposit Scheme to buy sooner?
The Australian Government 5% Deposit Scheme (formerly the First Home Guarantee) allows eligible first home buyers to purchase with as little as a 5% deposit without paying LMI, with the government guaranteeing up to 15% of the loan. Income caps were removed from October 2025, broadening eligibility. This can accelerate entry into the property market, which matters in a rising market. However, a smaller deposit means a larger loan, higher repayments, and more interest paid over the life of the loan. It also means you start with less equity buffer if prices fall. It is worth considering if you can comfortably service the higher repayments.
What ongoing costs should I budget for as a homeowner in Australia?
Beyond your mortgage: council rates ($1,000–$3,500/yr depending on suburb and state), building and contents insurance ($2,000–$4,000/yr), water rates ($800–$1,500/yr), and general maintenance (budget 1–1.5% of property value per year for a house, less for a newer apartment). Strata levies for apartments can range from $3,000 to $20,000+ per year depending on building size and facilities. These costs are not included in this calculator; they typically add $5,000–$15,000/yr to the effective cost of ownership.
Is rent dead money?
Not exactly, and the same question applies to much of a mortgage payment. On a $640,000 loan at 6.5%, the first monthly repayment of $4,045 includes approximately $3,467 in interest and only $578 in principal reduction. That interest builds no equity and is just as 'gone' as rent. Stamp duty, maintenance, insurance, and council rates also build no equity. The meaningful comparison is the total long-term financial outcome of each path, including what happens to the capital you are not locking into a deposit, not simply 'rent vs mortgage repayment'.
Should I invest my deposit in shares instead of buying?
It is worth modelling both scenarios. $160,000 invested in a diversified portfolio averaging 9% per year grows to approximately $2.1 million over 30 years. After accounting for 30 years of rent payments, the renter's net wealth position is lower than the gross investment figure suggests, but the gap between renting-and-investing versus buying narrows considerably compared to renting-and-spending. The main advantage of property is leverage: you gain on the full $800,000 asset value, not just your $160,000 deposit. Shares offer higher liquidity, no maintenance costs, and easy diversification. Many Australians do both, buy property for stability while building additional wealth through superannuation and other investments. Use the ETF Growth Calculator to model how your deposit might perform as a share market investment.

How this calculator works

Enter a property price, deposit, interest rate, and annual property growth rate. On the buy side, the calculator models a standard principal-and-interest mortgage and projects the property's value forward at the growth rate you enter. On the rent side, it models cumulative rent payments starting at the amount you specify and increasing by the annual rent growth rate. At the end of your chosen timeframe, it compares total outgoings and net financial position for each path.

The property growth rate assumption drives the result more than any other input. A difference of 2% per year, compounded over 30 years, produces dramatically different outcomes. Run the calculator at 3%, 5%, and 7% to see the range of plausible results rather than relying on a single figure. The buy scenario does not include ongoing ownership costs, council rates, insurance, and maintenance typically add $5,000–$15,000 per year, which means the buy result is slightly optimistic compared to reality.

This tool gives a financial comparison only. The break-even point, when buying becomes the financially superior choice, typically falls between five and ten years in most Australian capital city markets. If you plan to move sooner, the upfront costs of buying (stamp duty, conveyancing) may not be recovered in time.

Methodology

  • Assumptions: Constant mortgage interest rate and annual property growth rate over the full term; rent increases at a constant annual rate; 20% deposit assumed; ongoing ownership costs (council rates, insurance, maintenance) not included.
  • Calculation: Monthly mortgage balance tracked via standard amortisation; property value = purchase price × (1 + growth rate)^years; cumulative rent = monthly rent payments accumulated with the specified annual increase.
  • Limitations: Does not model the opportunity cost of the deposit, transaction costs on sale, tax on capital gain, or interest rate changes over the term.

Sources

Last updated: June 2026

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