Rent vs Buy Calculator
Compare the net cost of buying a home to renting and investing the difference over a set number of years.
- Net cost of buying
- $86,527
- Net cost of renting + investing
- $193,423
This calculator provides estimates only. It is general information, not financial or taxation advice, and doesn't account for your full personal circumstances. Confirm figures with your lender or a licensed adviser before making a decision.
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How this calculator works
Comparing renting to buying isn't just "rent is dead money" versus "buying builds equity" — both paths have real costs. Buying costs interest, maintenance and upfront fees, offset by capital growth. Renting costs the rent itself, offset by what you could earn investing the deposit you didn't spend. This calculator nets each side out to a single comparable "net cost" over your chosen period.
For buying, the net cost is total mortgage interest paid, plus maintenance, plus upfront costs (stamp duty, legal fees), minus the property's capital growth over the period. For renting, it's total rent paid (growing each year) minus the investment gain you'd make putting the deposit and upfront costs into the market instead.
Worked example: a $700,000 property with a 20% deposit, 6.2% mortgage rate over 30 years, compared against $550/week rent, over a 10-year horizon. Buying's net cost comes to about $86,500 (interest, maintenance and upfront costs largely offset by $336,000 in assumed capital growth). Renting and investing the $170,000 deposit-plus-costs at 6% comes to a net cost of about $193,400. In this scenario, buying comes out about $106,900 cheaper over 10 years.
The result is extremely sensitive to your growth and return assumptions — a lower property growth rate or a higher investment return can flip the answer. Try a few scenarios rather than trusting a single result.
Frequently asked questions
- Why doesn't the deposit or loan principal show up as a 'cost' of buying?
- Because that money converts into home equity rather than being spent — you get it back (adjusted for the property's value) if you sell. Only the interest, maintenance and upfront fees are money that's genuinely gone, which is why the net-cost comparison focuses on those.
- What assumptions matter most to the result?
- Property growth rate and investment return rate drive the outcome the most — small changes to either can flip which option looks cheaper. Rent growth and mortgage rate matter too, but usually less dramatically over a typical 5–10 year comparison window.
- Does this account for selling costs if I sell the property?
- No — agent commission, marketing and legal fees on sale (commonly 2–3% of the sale price) aren't included. Add them manually to the buying side if you're planning to sell at the end of the comparison period.