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.

$

Current or expected monthly rent for a comparable property.

$

Purchase price of the property you are considering buying.

$

Your upfront deposit. A 20% deposit avoids 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) and deposit opportunity cost. General guidance only — not financial advice.

Net equity vs cumulative rent

30-year comparison — hover to inspect each year

Net equity (buying)Cumulative rent paid

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 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 — often cited as 1–2% of property value per year 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 heavily on your local market, time horizon, and what you do with the capital you're not putting into a deposit.

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 very 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.

Frequently asked questions

Is it better to rent or buy in Australia in 2025?
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, with current high interest rates, monthly mortgage repayments on a median-priced home significantly exceed rent on the same property — the break-even in some Sydney suburbs requires 5–7 years or more. For shorter horizons or uncertain circumstances, renting often makes more 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–$35,000 in most states) 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 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 First Home Guarantee (FHBG) to buy sooner?
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. 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.

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