How does the calculator decide rent vs buy?

It computes the total cash cost of renting over your horizon (rent compounded by rent inflation) versus the total cost of buying — deposit, Transfer Duty, bond repayments and annual holding costs — then subtracts the home equity you would own at the end. It also adds the opportunity cost of investing your deposit instead of putting it into a house.

What holding costs should I include?

For buying, ongoing costs include rates and taxes, levies for sectional title, building insurance, and maintenance — commonly 1% to 2% of the property value per year combined. Renting avoids these but you build no equity. The tool lets you set the holding-cost percentage.

Why does the deposit's opportunity cost matter?

Money tied up as a deposit can't be invested elsewhere. If you could earn, say, 9% in a balanced fund, the deposit's forgone growth is a real cost of buying. The tool grows your deposit at the investment return you set and counts that as part of renting's advantage.

Does buying always win over a long horizon?

Not necessarily. South African house-price growth has often lagged inflation in real terms, and high bond rates make early years interest-heavy. Over short horizons, Transfer Duty and transaction costs usually make renting cheaper. The longer you stay and the faster prices grow, the more buying favours.

Is this a precise forecast?

No — it is a planning model using your assumptions. Real outcomes depend on actual rate moves, price growth, and how long you stay. Treat the result as a directional comparison and test a few growth and rate scenarios.

South Africa Rent vs Buy Calculator

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Renting and buying in South Africa carry very different cost structures: renting is pure expense but flexible, while buying front-loads Transfer Duty and a deposit and builds equity over time. This calculator models both paths over your chosen horizon, including the often-overlooked opportunity cost of your deposit.

How it works

Renting cost is the sum of monthly rent compounded by annual rent inflation over the horizon. Buying cost combines the upfront and ongoing outlays, then credits the equity you would own:

buy cost  = deposit + transferDuty
          + Σ (bond repayments over the horizon)
          + Σ (annual holding costs, growing with the house value)
          − homeEquityAtEnd
rent cost = Σ (annual rent, each year × rentInflation)
          − depositGrownAtInvestmentReturn  (opportunity credit to renting)

Home equity at the end is the projected house value (price grown at the appreciation rate) minus the outstanding bond balance. The cheaper total wins.

Example and tips

For a R1.5m home with a R150k deposit versus R12,000/month rent over 7 years, at an 11.75% bond rate, 5% price growth, 6% rent inflation and a 9% investment return, the model typically shows renting modestly cheaper at short horizons because Transfer Duty and interest dominate early, with buying pulling ahead as equity accumulates. Test several price-growth and rate scenarios — the result is sensitive to both, and to how long you actually stay.