Rent vs Buy Property Calculator (Australia)

Compare the 10-year outcome of renting versus buying in Australia. Stamp duty (roughly 3-5% of the price) plus conveyancing costs are a significant upfront investment not captured in the default calculator. Negative gearing allows investors to offset rental losses against other income, which changes the calculus for investor buyers relative to owner-occupiers.

Stamp duty is the biggest barrier to entry in Australia

Australian stamp duty ranges from roughly 3.5-5.5% of the purchase price depending on state. On a AU$700,000 home, that is AU$25,000-38,000 before settlement. The combination of stamp duty, conveyancing, and building inspections typically adds 4-6% to the true cost of entry, which the default calculator does not include.

Net buy advantage (10-yr)

+$180,726

≈ · European Central Bank rate, 2026-09-11

Monthly mortgage

$3,620

Effective buy cost

$4,495

vs monthly rent

$3,000

Excludes maintenance, insurance, transaction costs, and tax effects. Illustrative only.

Buying is ahead over 10 years with these assumptions.

Property priceiThe purchase price of the property you're considering buying

DepositiThe down payment amount you would put down

Mortgage rateiThe annual interest rate on the mortgage

Monthly rentiThe monthly rent for comparable housing if you continue renting

How your deposit would grow if invested instead

10-year cumulative cost comparison

Effective cost of buying (including deposit opportunity cost) versus rent payments. Equity value is shown in the result above.

The calculator projects the 10-year financial outcome of each option.

Buying
  mortgage payment     = annuity PMT on (price − deposit) at the given rate
  opportunity cost/mo  = deposit × (investment return ÷ 12)
  effective buy cost   = mortgage payment + opportunity cost

  future property value = price × (1 + appreciation)^10
  equity at year 10     = future value − outstanding loan balance

Renting
  rent total = monthly rent × 120 months

Net buy advantage = rent total − (effective buy cost × 120) + (equity − deposit)

A positive net advantage means buying comes out ahead over 10 years with these assumptions. The result is highly sensitive to the appreciation and investment return inputs - small changes shift the outcome significantly.

The model does not account for principal paydown reducing the outstanding balance over time (equity is simplified to future value minus original loan). It also excludes maintenance, insurance, and transaction costs.

This page prefills 6.06% from the Reserve Bank of Australia — Statistical Table F6 Housing Lending Rates, published 2026-06-01.

This is a reference average, not a personal offer. Your lender's rate depends on your credit score, deposit size, and loan type. The rate you are actually quoted may be meaningfully higher or lower.

The rate field is editable. Type your lender's quoted rate to see your own numbers.

Reference rate sourced from official central bank or national statistics body data where available. This is an estimate for illustrative purposes only. Confirm costs and rates with your lender before proceeding.

How the rent vs buy comparison works

Buying and renting are not directly comparable because buyers build equity while renters do not. The calculator accounts for this by computing the deposit's opportunity cost - what it would have earned if invested. Mortgage payments are split into interest (a cost, like rent) and principal (equity you keep). Appreciation adds to the buyer's net worth. The result shows which option produced more total wealth over 10 years given your assumptions.

What this doesn't include

This is a simplified financial model. It does not include property maintenance costs (typically 1–2% of value per year), buildings and contents insurance, property taxes or council tax, or the transaction costs of eventually selling (estate agent fees, legal costs). These favour renting in the short run and erode the buy advantage, especially for shorter holding periods.

Why the result is sensitive to assumptions

Small changes to the appreciation rate or the deposit return assumption can flip the result. At 3% appreciation and 7% investment return, renting often wins over 10 years in expensive markets. At 6% appreciation and 4% investment return, buying typically wins. Neither assumption is guaranteed. Use this to understand the range of outcomes, not to reach a definitive answer. The non-financial factors - stability, school catchments, flexibility - are real and matter.

Frequently asked questions

Is buying always better than renting long-term?

Not necessarily. The outcome depends on local property appreciation, the opportunity cost of your deposit, how long you stay, and what you pay in transaction costs upfront. In high-cost cities where prices are stretched relative to rents, renting and investing the saved capital has historically kept pace with buying over 10-year horizons. The calculator lets you model your specific assumptions.

What appreciation rate should I use?

Use a long-run real (inflation-adjusted) appreciation rate for the specific market. UK-wide average has been roughly 4-5% nominal over long periods, but London has been higher and some northern cities lower. Australian capital cities have averaged 6-7% nominal since the 1990s. For a conservative base case, use 3% nominal. The calculator is sensitive to this input - try a range.

Does the calculator include stamp duty, legal fees, and other purchase costs?

The default calculation does not include transaction costs - they are not added to the deposit or effective cost of ownership automatically. For a realistic comparison, you should factor these in by increasing your effective deposit amount by the transaction costs (typically 3-8% of the property price depending on country). This extends the break-even period significantly.

What is the opportunity cost of a deposit?

Your deposit cannot be invested once it is used to buy a property. The opportunity cost is what that capital could have earned if invested in shares or bonds instead. The deposit return field represents this: the annual return you could realistically achieve in an alternative investment. Using a 7% equity return is common for long-run projections, but it is speculative - equity returns are highly variable year to year.

How is the net buy advantage calculated?

The calculator computes the total cash paid as a buyer (mortgage payments plus the opportunity cost of the deposit) versus the total rent paid over 10 years. It then adds the equity built through appreciation and principal paydown. The net buy advantage is the difference: positive means buying produced more total wealth, negative means renting and investing the deposit ahead.

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Written and maintained by the Reckoner team

The repayment engines behind this site are tested against worked examples published by FRED, the Bank of Canada, the Bank of England and the Reserve Bank of Australia. Found an error? Contact us

Last reviewed September 13, 2026