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Buying and selling property

Rent vs Buy Calculator

Follow two households with the same savings and the same budget, one renting and one buying, and compare where each ends up.

Cost
Free
Your figures
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Method
Set out below
years
Buying
$
$

Both households start with this. The buyer spends it on the deposit and purchase costs.

$

Stamp duty, legal and inspection costs. The stamp duty and buying costs calculators can estimate them.

% p.a.
years
$a year

Council rates, insurance, strata and maintenance.

% p.a.
% p.a.
Renting
$a week
% p.a.
% p.a.

Earned on the renter's savings and on whatever either household invests.

Ahead after 10 years

Buying by $93,561

Buying leaves $615,132 in home equity and investments. Renting leaves $521,571 invested.

Buyer's home equity
$615,132
Buyer's investments
$0
Renter's investments
$521,571
Monthly loan repayment
$4,076.94
Rent, year 1
$33,800
Loan and ownership costs, year 1
$55,923
The loan is 85% of the price. Lenders usually charge Lenders' Mortgage Insurance on loans over 80%, which is not included here.
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Estimate only, based on the figures entered and the assumptions listed below. It is not a quote, an offer of credit or personal advice.

Wealth by year

The buyer's home equity and investments against the renter's investments. At the start the buyer is behind by the purchase costs.

  • Buying
  • Renting

Buying ends at $615,132. Renting ends at $521,571.

Show the figures as a table
Wealth at the end of each year, buying and renting
PointBuyingRenting
Start$120,000$160,000
End of year 1$160,350$191,723
End of year 2$202,496$224,377
End of year 3$246,520$257,982
End of year 4$292,508$292,559
End of year 5$340,553$328,128
End of year 6$390,749$364,710
End of year 7$443,198$402,325
End of year 8$498,003$440,994
End of year 9$555,276$480,736
End of year 10$615,132$521,571

How this calculator works

Both households start with the same savings and spend the same amount on housing each year. The buyer pays the mortgage and ownership costs; the renter pays rent and invests the difference.

The result depends heavily on the growth and return rates you choose, so try a cautious set alongside an optimistic one.

Assumptions

  • The buyer puts savings towards the deposit and purchase costs and borrows the rest, on a principal and interest loan with monthly repayments. Any savings left over are invested.
  • Each year, whichever household spends less on housing invests the difference at the investment return.
  • Rent, ongoing costs, property values and investment returns change once a year at the rates entered.
  • Tax, selling costs and inflation are not taken into account. All figures are in future dollars.

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