Rent vs Buy
Calculator
Model the break-even point where buying beats renting — factoring in stamp duty, deposit opportunity cost, property growth, and investment returns.
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| Year | Buy wealth | Rent wealth | Difference |
|---|---|---|---|
| 1 | $224,214 | $288,004 | −$63,790 |
| 2 | $270,380 | $345,980 | −$75,600 |
| 3 | $318,589 | $408,056 | −$89,467 |
| 4 | $368,933 | $474,542 | −$105,609 |
| 5 | $421,512 | $545,777 | −$124,265 |
| 6 | $476,428 | $622,125 | −$145,697 |
| 7 | $533,790 | $703,979 | −$170,188 |
| 8 | $593,711 | $791,762 | −$198,051 |
| 9 | $656,311 | $885,933 | −$229,622 |
| 10 | $688,407 | $986,984 | −$298,577 |
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The Honest Framework for Rent vs Buy in Australia
The rent-vs-buy decision is often framed as renting being "dead money" — but this ignores the opportunity cost of capital tied up in a property. A $180,000 deposit invested in a diversified index fund returning 8% per annum grows to approximately $388,000 over 10 years. Meanwhile, a property must generate capital growth and rental yield sufficient to beat that compounding return, after accounting for all carrying costs, to justify the buy decision on purely financial terms.
True ownership costs extend well beyond the mortgage repayment. Council rates typically run $1,500–$3,500 per year depending on the local government area. Maintenance and repairs average 1–2% of the property's value annually — on a $750,000 home, that's $7,500–$15,000 per year. Strata levies on apartments add another $3,000–$12,000. These recurring costs rarely appear in simple buy-vs-rent comparisons but compound significantly over a 10-to-30-year ownership horizon.
Stamp duty creates a break-even hurdle that buyers often underestimate. In NSW, stamp duty on a $750,000 property is approximately $28,335. To simply recover this upfront cost at 5% annual capital growth, you need roughly 2.5 years of ownership before you're back to zero. Factor in mortgage costs versus renting the same property, and the break-even period often stretches to 5–7 years in major capital cities — meaning short-term purchases frequently underperform renting on a pure financial basis.