How does the rent vs buy comparison work?

Buying costs are upfront purchase costs (stamp duty and the deposit's lost investment return) plus ongoing mortgage interest and holding costs, offset by the equity you build and the home's capital growth. Renting costs are rent over the period, while your deposit stays invested and grows. The tool nets these out over your horizon.

What is the opportunity cost of the deposit?

If you buy, your deposit is locked in the property. If you rent, that same money could be invested in shares or another asset earning a return. The calculator credits the renter with this investment growth so the comparison is fair, not just rent versus mortgage.

Does capital growth guarantee buying wins?

No. Buying tends to win over long horizons when capital growth is solid and you stay put long enough to absorb the large upfront stamp duty. Short holding periods, high transaction costs or weak growth can make renting cheaper. The tool lets you test these assumptions directly.

What costs does buying include here?

Stamp duty, mortgage interest over the period, and annual holding costs such as council rates, insurance, strata and maintenance entered as a percentage of value. It does not deduct principal repayments from your wealth because those convert cash into equity you keep.

Are these figures financial advice?

No. This is a simplified model to compare scenarios. It ignores tax effects like negative gearing and capital gains tax, transaction costs on selling, and your personal circumstances. Treat it as a starting point, not advice.

Australia Rent vs Buy Calculator

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An Australia rent vs buy calculator that compares the two paths over a horizon you choose — typically 10 years — so you can see which leaves you financially better off rather than guessing. Crucially, it accounts for the thing most casual comparisons miss: the opportunity cost of your deposit, the return that money could earn if you rented and invested it instead.

How it works

The model nets out the real cost of each path over your horizon.

Buying costs:

upfront   = stamp duty + deposit (which stops earning investment returns)
ongoing   = mortgage interest + holding costs (rates, insurance, strata, upkeep)
benefit   = capital growth on the property + equity built from repayments
netBuy    = upfront + ongoing - benefit (the deposit is recovered as equity at the end)

Renting costs:

netRent   = total rent paid (growing with rent inflation)
            - investment growth earned on the deposit kept invested

Whichever net cost is lower is the cheaper path over that period. Because stamp duty is a large upfront hit, buying usually needs several years of capital growth to pull ahead — which is exactly what the horizon slider exposes.

Example and notes

Buy a 750,000 AUD home with a 150,000 AUD deposit at 6%, versus renting an equivalent home at 2,600 AUD/month. With 4% capital growth, 3% rent inflation and a 7% return on invested savings, buying often wins by year 7–10 but renting can win over shorter periods.

This is a simplified comparison: it ignores capital gains tax, negative gearing, selling costs and your tax position. All figures are computed locally in your browser and are not financial advice.