Rent vs buy calculator — which is better for you?

How this calculator works

This calculator compares two scenarios over your chosen time period. In the buying scenario, it calculates your property equity each year — the property's estimated value minus your remaining loan balance. In the renting scenario, it calculates the value of an investment portfolio — starting with what you would have spent on a deposit and upfront buying costs, growing at your assumed investment return rate, with monthly contributions of any amount you save by renting versus buying.

The break-even year is when the buyer's net worth (equity) exceeds the renter's net worth (investment portfolio). Before this point, renting and investing has produced a higher net worth. After it, buying has.

Why the result is so sensitive to assumptions

The rent vs buy comparison is more sensitive to assumptions than almost any other personal finance calculation. Small changes in assumed property growth or investment returns can shift the break-even year by several years. This is not a flaw in the calculator — it reflects the genuine uncertainty of predicting future asset prices.

Property growth and investment returns are editable scenario assumptions, not verified current market averages or forecasts. Test lower and higher returns and consider fees, tax and investment risk before relying on the comparison.

What the calculator does not account for

This comparison focuses on financial outcomes — net worth after a given period. It does not capture several important non-financial factors that often matter as much or more in the rent vs buy decision.

Security and stability. Homeowners cannot be asked to vacate by a landlord. For families with school-age children or those who value community roots, this security has real value that is not measured in dollars.

Flexibility. Renters can relocate quickly for career opportunities, relationship changes, or lifestyle preferences. Breaking a lease costs weeks of rent; selling a property costs months of time and tens of thousands in agent fees, stamp duty, and legal costs.

Forced saving. For many Australians, mortgage repayments function as a disciplined form of forced saving. Renters who invest the difference need genuine savings discipline to achieve the same outcome.

Renovation and personalisation. Owners can renovate, decorate, and modify their home. Renters generally cannot.

The renting and investing argument

The renting scenario in this calculator assumes you invest the difference between renting costs and buying costs each month. This is the only valid comparison — renting only makes financial sense as an alternative to buying if you invest the capital and cash flow differences, not if you spend them.

In practice, many renters do not consistently invest the difference. This behavioural reality often makes buying the better outcome even when the pure numbers suggest renting could win, because homeownership provides a structured, automatic form of forced saving through mortgage repayments.

Costs included in the buying scenario

Buying a home in Australia involves significant upfront and ongoing costs that this calculator models using stated assumptions. It does not include every possible transaction cost. Upfront: stamp duty (calculated for your selected state, with first home buyer concessions where applicable), LMI (an illustrative model above 80% LVR, without assessing guarantees or waivers), conveyancing (estimated at $2,000) and a building and pest inspection (estimated at $600). Ongoing: mortgage principal and interest, council rates, home insurance, optional strata, and maintenance and repairs at a default of 1% of the property value per year.

Selling costs (agent commission, marketing, capital gains tax) are not modelled — the calculator assumes you continue to hold the property at the end of the analysis period. If you intend to sell, real-world net worth will be lower than shown.

How long should you compare?

The analysis period dramatically changes the conclusion. Buying typically underperforms renting over short periods because of high upfront costs (stamp duty, LMI, conveyancing) which take years to recover through property growth and principal reduction. Over longer periods, the buyer benefits from leveraged capital gains and a falling mortgage balance, while the renter loses some of their advantage as rents rise. Use 5 years if you might sell soon, 10 years for a typical mid-term comparison, and 20–30 years for a true long-term lifecycle view.

Is it better to rent or buy in Australia?

The rent-versus-buy result depends on rent, financing, deposit, duty, holding costs and assumed investment and property returns. Compare scenarios below; assumed growth is not a forecast and there is no universal break-even year.

Frequently asked questions

Is it better to rent or buy in Australia in 2026?

Whether to rent or buy depends on the property price, rent, financing, upfront and holding costs, how long you stay, and alternative investment outcomes. Compare rent or buy scenarios rather than assuming a universal winning option or break-even period.

When does buying a home become cheaper than renting?

The break-even point depends on property price, deposit, mortgage costs, rent, holding costs and assumed returns. Change these inputs to see whether or when the model crosses over. Growth assumptions are scenarios, not market forecasts.

What happens to my deposit if I keep renting?

Calcy models an alternative scenario in which the deposit and differences in ongoing costs are invested at the return you choose. This is a comparison assumption, not a recommendation or a claim that renting is only sensible if you invest.

How much does property growth change the answer?

Property growth and investment returns can materially change the result. Calcy's sensitivity table compares alternative assumptions; it does not forecast returns or establish that one input always dominates.

Does this rent vs buy calculator include stamp duty and LMI?

Yes. Stamp duty is calculated for your selected Australian state (with first home buyer concessions where applicable) and the Calcy model adds illustrative LMI above 80% LVR, without assessing a lender waiver or government guarantee. Confirm your actual LMI requirement and premium with the lender. Conveyancing ($2,000) and a building inspection ($600) are also included in the upfront costs used in the comparison.

Data sources

RBA Cash Rate — Reserve Bank of Australia — 30 Sep 2026 (checked 14 Oct 2026)

Cotality — Australian property indices — Apr 2026