Rent vs Buy Calculator

Should you rent or buy? Compare renting versus buying the same home in Australia — repayments, council and water rates, insurance and upkeep against rent that keeps rising.

Most comparisons stack a mortgage repayment against a rent figure and stop there. That's not the real question. Owning brings council rates, water rates, insurance, strata and maintenance; buying brings stamp duty and settlement costs up front; and the money you'd have put into a deposit could have stayed in savings instead.

This one models both paths in more detail — including whether and when buying moves ahead on the assumptions you choose. It's an illustration based on those assumptions, not a prediction, and it isn't credit or financial advice.

Renting can be cheaper than owning the same home, particularly in some sought-after, high-priced suburbs. Local rents reflect supply, demand, the property itself, and what renters in that area are prepared and able to pay — while sale prices reflect a different buyer market. That can mean renting a home you could not comfortably buy. Where rents are unusually high relative to prices, however, buying may compare more favourably.

It also provides flexibility. If there's any real chance you'll move city, change jobs, or rethink where you want to be inside the next few years, renting avoids paying stamp duty and selling costs twice over — and those costs are what sink most short-hold purchases.

And it opens a strategy worth taking seriously: rent where you want to live, buy where you can afford. Renting in the suburb you love while owning an investment property somewhere more affordable lets you start building equity years earlier than waiting to afford the suburb outright. It isn't for everyone — different lending rules, land tax, capital gains tax on sale and vacancy risk all apply — but it's a legitimate path and one we model with clients regularly.

Here's the part that rarely makes it into the comparison. Take the worst case for buying: you purchase a home and, over thirty years, its value doesn't move at all. Not one dollar of growth. At the end of that thirty years you still own the home outright, the repayments stop, and your housing cost drops to rates, water, insurance and upkeep. You would no longer need to pay rent for that home.

Now take the same thirty years renting. At 3% annual increases, rent of $650 a week today is over $1,500 a week by year thirty — and there's no year thirty-one where it stops. That difference is important. A mortgage can cost more than rent at the start and may finish once it is repaid; rent can cost less at the start but continues for as long as you rent.

It's also worth saying that thirty years is a default, not a rule. A lot of what we do is looking at whether the term can be shortened — extra repayments, an offset account and a competitive rate can each help reduce it, depending on the loan and your circumstances. Whether that's suitable for you, and by how much, depends on your own situation.

The same home. One property, priced two ways: what it costs to buy it, against what it costs to rent it. This is the tougher comparison for buying, and the more honest one — a $750,000 home often rents for less than the mortgage on it. Use this when you're weighing up a specific place.

The same monthly outlay. Same money out the door, two different destinations. Put in what you can afford each month and we solve back to the price that outlay would buy. Use this when the question is "if the rent I'm already paying went into a mortgage, what would I own?"

We deliberately don't pull suburb-level rents or prices from a data feed. Those figures go stale, they vary street by street, and you already know the two numbers that matter: the rent you pay now, and the price of what you're looking at.

Rentvesting means renting the home you live in while owning an investment property somewhere more affordable, with a tenant's rent contributing towards that loan. For people priced out of the suburb they want to live in, it can be a way to start owning something sooner rather than waiting to afford that suburb outright.

It is not a free lunch. Investment lending is usually priced higher, land tax and capital gains tax can apply, vacancies and repairs are yours, and you are still exposed to rent increases where you live. Whether it stacks up depends on the numbers and on your own tax position, so treat this as general information and get advice from a suitably qualified tax or investment professional before acting.

You can model the first half of the question here: switch to "the same monthly outlay" and see what price the money you currently pay in rent would support.