Rent vs Buy Calculator

Comparing Costs and Equity Separately

A rent vs buy calculator compares the assets left in each scenario after the same period. Mortgage principal repayments reduce your debt and build equity. Interest and ownership expenses reduce the money available for other purposes.

The cash chart shows everything paid for housing, including the buyer's deposit and principal repayments. The headline comparison uses assets instead. It adds the buyer's savings to the sale proceeds after selling costs and the remaining mortgage, then compares that amount with the renter's savings.

Both scenarios start with the same cash: the deposit plus upfront purchase costs. The renter keeps that cash in savings. Each month, both households receive a budget equal to the more expensive housing option and the cheaper option saves the difference.

In the starting example, the $800,000 home has a $160,000 deposit and a $640,000 mortgage. At 6% over 30 years, the monthly repayment is $3,837.12. The renter starts with $195,000, including the $35,000 the buyer spends on purchase costs.

After 10 years under the starting assumptions, the mortgage balance is $535,589. The buyer has $512,666 after selling costs and repaying that mortgage, compared with $496,309 in renter savings. Buying is ahead by $16,357, although its cumulative housing cash outlay is $774,044 against $387,479 in rent.

The Assumptions That Change the Result

Property growth, rent changes, ownership costs and savings returns each affect the comparison independently. The starting 3% growth assumptions and 4% savings return are examples, not forecasts. Change one assumption at a time to see which one changes your decision.

Property growth compounds annually. Rent and ownership costs change at each yearly anniversary, with the annual amount spread evenly across 12 months. Mortgage repayments follow a monthly principal-and-interest schedule, rounding payments and interest to cents.

Savings earn the annual rate divided by 12 each month, before that month's contribution. Enter an assumed return after tax and investment fees, or enter 0 to compare without returns. Moneysmart explains how compounding affects savings.

Include council rates, building insurance, maintenance and strata costs in annual ownership expenses. Include duty after any concessions and other upfront charges in purchase costs. Moneysmart's home-buying cost guidance explains the costs that sit outside a deposit.

The model assumes an owner-occupied home, a constant mortgage rate and no tax on sale. It excludes grants, renovation spending and changes in household income. All results use future dollars without adjusting for inflation.

Buying Now or Waiting

Buying now ties up the deposit and purchase costs immediately. Continuing to rent preserves that cash, but rent and the price of a future home can change separately. Compare a home you would rent with a home you would actually buy.

Use the same timeframe for both choices. This comparison models buying now against renting for the whole period, with a home sale at the end. Selling costs reduce the buyer's final equity even if you intend to stay, so the result compares assets that could be realised.

A shorter holding period gives purchase and selling costs less time to be offset by any property growth or loan reduction. Try shorter and longer periods, then change property growth and the savings return separately. A positive buying advantage in the sensitivity table favours buying under those assumptions; a negative amount favours renting.

A purchase after a period of renting needs a separate later-purchase scenario. This model does not insert that purchase partway through. The related deposit calculator separates the cash needed to buy from the amount borrowed.

What the Numbers Cannot Choose

A projected financial advantage cannot choose your location, housing stability or flexibility to move. A home that suits your family or work can be worth a different trade-off from the model's cash result.

Affordability also depends on whether the household can meet repayments when rates rise or income falls. This calculator compares financial scenarios; a lender's credit assessment determines whether a loan is available. Use assumptions you can sustain alongside the housing and personal choices you need to make.