Rent Versus Buy Calculator

Compare the estimated net wealth from buying a home with renting and investing the difference.

Both paths use the same starting cash and monthly budget. The option with the lower monthly outlay invests the difference. All amounts are AUD and every example assumption is editable.

Property and loan

Property price ($)

Deposit ($)

The renter invests this amount instead.

Purchase costs ($)

Include transfer duty, conveyancing, inspections and upfront finance costs. The renter invests this amount instead.

Mortgage interest rate (%)

Loan term (years)

Compare over (years)

This may be shorter or longer than the loan term.

Property growth (%/year)

Selling costs (% of sale price)

Include agent commission, marketing and legal costs expected at the end.

Renting and investing

Weekly rent ($)

Rent growth (%/year)

Investment return (%/year)

Use an expected return after investment fees and tax.

Ongoing ownership costs

Council and water rates ($/year)

Home insurance ($/year)

Strata or body corporate ($/year)

Use 0 if this does not apply.

Maintenance (% of property/year)

Applied to the estimated property value each month.

Other ownership-cost growth (%/year)

Applied to rates, insurance and strata.

Under these assumptions, renting leaves you ahead after 10 years

$151,731

Estimated net-wealth difference after the home is sold and the remaining mortgage is repaid.

Ending net wealth

Buying: $509,833
Renting: $661,564

Renting stays ahead from the start

The crossover is the first month the eventual leading option moves ahead and remains ahead through the selected period.

Estimated net wealth over time

BuyingRenting

Annual values

Year	Buying	Renting
0	$140,000	$200,000
1	$170,970	$237,934
2	$203,126	$277,472
3	$236,518	$318,691
4	$271,201	$361,670
5	$307,233	$406,495
6	$344,673	$453,253
7	$383,585	$502,038
8	$424,035	$552,948
9	$466,094	$606,088
10	$509,833	$661,564

What sits behind the result

Initial monthly buyer outlay: $4,945
Initial monthly rent: $2,817
Final property value: $1,075,133
Mortgage remaining: $538,422
Selling costs: $26,878
Buyer's investment balance: $0
Renter's investment balance: $661,564
Mortgage interest paid: $368,798
Ownership costs paid: $142,934
Rent paid: $392,779

Principal repayments are not treated as a cost: they reduce the mortgage and become home equity.

How assumptions change the result

Net-wealth advantage after 10 years when property growth and investment returns are two percentage points lower or higher.

Sensitivity of the result to property growth and investment returns
Property growth	Invest. 4%	Invest. 6%	Invest. 8%
1%	Rent+$235,288	Rent+$327,594	Rent+$435,104
3%	Rent+$58,742	Rent+$151,731	Rent+$259,981
5%	Buy+$152,281	Buy+$58,554	Rent+$50,492

How this comparison works

The buyer uses the deposit and purchase costs at the start. The renter invests both amounts. Each month, both paths receive the larger of the buyer or renter housing outlay; whichever path costs less invests the difference at the entered after-fees-and-tax return.

The mortgage uses monthly principal-and-interest repayments and a constant annual rate. Interest is calculated monthly on the remaining balance. Property value, rent, investments and recurring ownership costs compound monthly using the annual assumptions.

Buyer net wealth is property value less selling costs and the remaining mortgage, plus any investment balance. Renter net wealth is the investment balance. Rent, interest, maintenance, rates, insurance, strata and transaction costs do not become assets.

This planning estimate assumes a main residence and does not model grants, concessions, capital gains tax, investment tax, lender fees not entered in purchase costs, LMI added to the loan, offsets, redraw, refinancing, renovations, moving costs or changes in interest rates.

Financial results cannot capture tenure security, flexibility, renovation freedom or the personal value of living in a particular home. Test several assumptions rather than relying on the example forecast.