Rent vs Buy Calculator for Australian Buyers

The calculator builds two parallel scenarios over the years you choose. On the buying side it amortises your loan to find your repayments and remaining balance, grows the property at your chosen rate, and tallies every dollar you put in: the deposit, all repayments made in the period, and your annual ownership costs. Your buying net position is the future property value, minus what you still owe, minus everything you paid in.

On the renting side it assumes you invest the deposit you would have used to buy and earn your chosen return on it, while paying rent that rises each year. Your renting net position is the value of that investment minus the total rent paid. The verdict is simply the gap between the two net positions, so a positive gap means buying wins and a negative gap means renting and investing wins.

Three inputs move the result more than any others: the property growth rate, the return on your invested deposit, and how long you stay. Higher property growth and a longer time frame favour buying, because equity compounds on the full property value while your costs are largely fixed. A higher investment return favours renting, because your deposit is working harder elsewhere.

None of these rates are guaranteed, and past growth is not a promise of future growth. The honest approach is to test a realistic range rather than a single hopeful number, and to remember that this is a simplified model. It does not include stamp duty, lenders mortgage insurance, selling costs or tax effects, so treat the output as a guide and confirm the detail with a qualified financial adviser.

Buying usually pulls ahead the longer you hold, for two reasons. First, your repayments steadily convert into equity instead of disappearing as rent, so your ownership cost is partly forced saving. Second, capital growth applies to the whole property value, not just your deposit, which is the leverage effect of borrowing to invest.

The flip side is that the early years of ownership are repayment heavy and the upfront costs are real, so buying for a short stay often loses to renting once you factor in stamp duty and selling costs. As a rough rule, the more confident you are about staying put for many years, the more buying makes sense. The equity calculator can show how that equity builds over time.

Renting is not money down the drain. It buys flexibility, it avoids the large upfront costs of buying, and it frees up your deposit to invest in assets that may grow faster than property. If you genuinely invest the difference and earn a strong, consistent return, renting can beat buying, particularly over shorter time frames or in markets with weak capital growth.

The catch is discipline. The renting path only works if you actually invest the deposit and the ongoing savings rather than spending them. For many people the enforced saving of a mortgage is the bigger behavioural win, even if a spreadsheet says renting and investing could edge ahead. Run both scenarios honestly and be realistic about which one you would actually stick to.