Compare the long-term cost of renting vs buying a home, including equity, appreciation, taxes, and maintenance.
Rates as of Q2 2025 (example)
This calculator compares the true long-term cost of renting versus buying a property over a time horizon you choose. The buy side accounts for your deposit, mortgage repayments, council rates, maintenance and insurance costs, and the equity and appreciation you build up — while the rent side tracks your cumulative rent payments with annual increases. It shows you which option has cost you more (or less) net over the comparison period, and where the two paths cross on a year-by-year chart.
The calculator runs a year-by-year simulation over your chosen comparison period. For the buy side: it tracks the mortgage amortisation (principal and interest each month), cumulative council rates and maintenance costs (applied as a percentage of the growing property value each year), and subtracts the equity you have built up (property value minus remaining loan balance) — giving a "net cost of buying." For the rent side: it accumulates annual rent payments, growing by the assumed rent increase rate each year — giving a "total cost of renting."
Formula summary: Net Cost of Buying = Deposit + Cumulative Mortgage Payments + Cumulative Rates & Maintenance − Equity (Property Value − Remaining Balance). Total Cost of Renting = Sum of annual rent payments (growing at the rent increase rate). Mortgage Monthly Repayment = standard amortisation formula using your loan amount, rate, and term.
Example: A A$650,000 property with a 20% deposit (A$130,000), a 6% home loan rate (example rate — enter your actual rate) over 30 years, A$2,200/month rent, 3% annual appreciation, 3% annual rent increase, 0.4% council rates, and 1% maintenance, compared over 10 years: the monthly mortgage repayment is about A$3,117.66. After 10 years the property would have grown to roughly A$873,545.65 and the buyer would have around A$438,379.88 in equity, giving a net cost of buying of about A$173,190.59. The renter would have spent about A$302,646.41 over the same period — making buying cheaper by roughly A$129,455.82 in this scenario. (Note: results change significantly with different assumptions — try adjusting appreciation, rent increases, and the comparison period.)
Whether renting or buying is better in Australia depends heavily on the specific numbers, time horizon, and life circumstances — and the answer is not as straightforward as cultural narratives around "the great Australian dream" of homeownership might suggest. Upfront costs not included in this calculator (but relevant to the true cost of buying) include stamp duty, which varies significantly by state and property value, legal and conveyancing fees, and building and pest inspection costs — adding these would increase the effective cost of buying, particularly over shorter time horizons. In high-price capital city markets such as Sydney and Melbourne, the breakeven point where buying becomes cheaper than renting over the comparison period can be many years away, particularly when mortgage repayments on a median property significantly exceed the equivalent rent. In contrast, in regional markets or cities with stronger rental yields, buying can become cost-competitive much sooner. One factor this calculator does capture is the forced savings and wealth accumulation component of buying: mortgage repayments build equity over time, whereas rent payments do not. However, the alternative — investing the difference between your rent and what a mortgage would cost into a diversified portfolio — is a legitimate strategy that may outperform property appreciation in some scenarios. The fairest comparison also includes opportunity cost on the deposit, which this calculator does not model. For a more complete picture, use the results here as one input alongside our Home Deposit Calculator, Stamp Duty Calculator, and LMI Calculator to understand the full upfront cost of buying in your state.
No — stamp duty is not included in this calculator's buy-side costs. Stamp duty is payable upfront on the purchase of a property and varies significantly by state, territory, and property value (with concessions available for first home buyers in most states). For a buyer in New South Wales, Victoria, or Queensland, stamp duty on a A\$650,000 property can be tens of thousands of dollars, which meaningfully increases the true net cost of buying — especially over shorter time horizons. Use our Property Stamp Duty Calculator to estimate the duty for your state and add it to your comparison.
Long-run Australian capital city property price growth has historically averaged roughly 6-7% per year in nominal terms (before inflation), but this includes extended boom periods followed by flat or negative periods, and varies substantially by city and suburb. A conservative planning assumption of 2-4% nominal annual appreciation (closer to historical averages adjusted for the current higher interest rate environment) is often used to avoid overestimating the buy-side advantage. Try multiple assumptions to see how sensitive the result is.
Council rates are entered as a percentage of the current property value and are recalculated each year as the assumed property value grows. In practice, council rates are a fixed annual levy (set by your local council) that increases over time — using a percentage of property value is a simplification for planning purposes. Typical Australian council rates range from around 0.2% to 0.6% of unimproved land value (not market value), so the 0.4% default is a rough approximation — check your local council's rates notice for a more accurate figure.
The net cost of buying is your total cash outlay on the buy side (deposit + mortgage repayments + council rates + maintenance) minus the equity you have built up in the property (property value minus remaining mortgage balance). This represents what buying has truly cost you in net terms after accounting for the wealth you have accumulated — since some of your mortgage repayments are building equity (an asset) rather than being "spent."
Australian advertised rents have risen sharply in recent years, but long-run rent inflation tends to track roughly in line with general inflation over time. The 3% default is a reasonable long-run assumption in a 2-3% inflation environment. If you're in a market where rents have been rising faster recently, you might use a higher rate for the near term — but be cautious about projecting recent rent growth forward for 10-20 years, as this would imply rents becoming unaffordable relative to incomes.
Not necessarily — this calculator compares cumulative financial costs and does not capture all relevant factors. Owning a home provides stability and control that renting does not, but also comes with risks (interest rate changes, maintenance obligations, illiquidity). Renting provides flexibility to move for work or lifestyle without the transaction costs of selling. The financial comparison here is a useful starting point, but should be considered alongside your personal circumstances, job security, family plans, and risk tolerance.
Disclaimer: The information, rates, and figures provided on this page are for educational and illustrative purposes only and do not constitute financial advice. All assumptions — including interest rates, property appreciation, rent increases, council rates, and maintenance costs — are examples only and do not represent guaranteed or likely outcomes. This calculator does not include stamp duty, legal fees, lenders mortgage insurance, or the opportunity cost of the deposit. Actual outcomes depend on individual circumstances, local market conditions, and future changes in interest rates and property values. Consult a qualified financial adviser before making any property purchase or rental decision.