Rent vs Buy Calculator Australia

Buying isn't automatically 'building equity' and renting isn't 'dead money' — each path has real costs the other avoids. This calculator runs both over a decade and shows which leaves you wealthier.

After 10 years, you're ahead by

—

Assumes rent grows 3%/yr, ownership costs (rates, insurance, maintenance) 1.5% of value/yr, 30-year loan, renter invests the deposit plus any monthly cash-flow difference. Ignores CGT (none on your own home) and tax on investment earnings.

Uses official 2026-27 rates (last reviewed July 2026). Estimates only — see assumptions below.

What each side actually pays

The buyer's unrecoverable costs: mortgage interest (not principal — that's forced saving), council rates, insurance, maintenance (~1–2% of value yearly), strata if applicable, plus the one-off hit of stamp duty and buying costs that can top $40,000 in Sydney or Melbourne. The renter's unrecoverable cost is one line: rent. The honest comparison is buyer's unrecoverable costs vs rent, with the renter investing the deposit they didn't spend — which is exactly what this calculator simulates.

What tips the scales

Price-to-rent ratio. Where a year's rent is less than ~4% of the price (most inner Sydney and Melbourne), renting-plus-investing often wins on pure numbers. Where rent runs 5%+ of price (many regional areas, Perth, Adelaide), buying usually wins quickly.
How long you'll stay. Stamp duty and agent fees on the way out mean buying rarely beats renting inside 5 years. Past 10 years, leverage and zero CGT on your own home compound in the buyer's favour.
Discipline. The renter only wins if the difference is genuinely invested. A mortgage is forced saving; a rental saving spent is just consumption.

What the spreadsheet can't price

Owning buys security of tenure — no lease non-renewals, pets without permission, renovating at will — plus an aged-pension system and tax code heavily tilted toward home ownership (your home is CGT-exempt and mostly exempt from the pension assets test). Renting buys mobility and the option to chase jobs. These are worth real money in both directions; the calculator deliberately leaves them to you.

Try the pessimistic case before deciding: growth at 2%, investment returns at 8%. If buying only wins with optimistic property growth, you're making a leveraged bet, not a lifestyle decision — fine, but know which one you're making.

Frequently asked questions

Is renting really dead money?

No more than mortgage interest, rates, insurance and maintenance are. The buyer's interest on a 90% loan in year one often exceeds the rent on the same property. What matters is each side's unrecoverable costs and what the renter does with the deposit.

How long do I need to own for buying to beat renting?

Typically 7–10 years at Australian price-to-rent ratios — the up-front stamp duty and eventual selling costs need years of growth to overcome. Shorter horizons usually favour renting.

Does this account for capital gains tax?

Your own home is CGT-exempt, which is built in. The renter's investment earnings would in reality be taxed, so the model is slightly generous to renting — treat close results as a tie.

Why does the result change so much with the growth rate?

Because the buyer is leveraged roughly 5:1. At 4% growth on an $800,000 home, equity grows $32,000 a year on a $160,000 deposit — leverage amplifies both the upside and the downside.

Sources

Moneysmart — Renting vs buying