Rent vs Buy Calculator - Australia
Compare buying against renting and investing the difference, measured on net wealth at the end of the period rather than monthly cost. Buying almost always costs more month to month early on - the real question is whether equity and capital growth more than make that back over your actual holding period.
Your details
Stamp duty, legals, inspections.
Council rates, insurance, strata, maintenance.
Assumptions
Renting
Assumptions
| Purchase price | $850,000 |
| Deposit | $170,000 |
| Loan | $680,000 |
| Monthly repayment | $4,121 |
| — | |
| Property value after 10 years 4.0% a year | $1,258,208 |
| Loan balance then | $569,355 |
| Selling costs | − $31,455 |
| Net equity | $657,397 |
| Total spent buying Deposit, costs, repayments, rates and upkeep | $764,492 |
| — | |
| Total rent paid | $417,285 |
| Portfolio if you invested instead | $630,045 |
| Difference | $27,352 |
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Frequently asked questions
Why does renting often win over short periods?
Stamp duty and selling costs are large, one-off, and unavoidable. On an $850,000 purchase they can total $60,000 or more, which needs several years of growth just to recover. Under about five years, buying rarely wins unless the market moves sharply in your favour.
Is rent really dead money?
No more than mortgage interest is. In the early years of a 30-year loan the great majority of each repayment is interest, not principal - money that also buys you somewhere to live and builds no equity. The meaningful comparison is interest plus rates plus upkeep against rent, which is much closer than the slogan suggests.
General advice warning: This calculator provides general information only. It does not take into account your objectives, financial situation or needs, and it is not personal credit or financial advice.
Results are estimates based on the inputs and assumptions shown. Any interest rate used is an example and is not an offer of credit. Speak to a licensed credit representative before acting on these figures.