Rent or Buy?

Compare the financial outcomes. Adjust the numbers, see the math, make an informed choice.

Quick Calculator

Step 1

Location State determines stamp duty rates, which are automatically calculated. Different states have different thresholds and rates. First Home Buyer First Home Buyer stamp duty concessions vary by state. Approximate 2025 thresholds:
• NSW: exempt ≤$800K, concessional ≤$1M
• VIC: exempt ≤$600K, concessional ≤$750K
• QLD: exempt ≤$500K, concessional ≤$550K
• WA: exempt ≤$430K, concessional ≤$530K
• SA: exempt ≤$650K

Verify current rules — thresholds change. Does not include FHOG cash grant.

Annual Salary (gross, excl. super) Gross salary before tax, excluding super. E.g. contract says "$120,000 + super" → enter $120,000. Income tax + Medicare Levy are calculated automatically using progressive Australian tax brackets. The result is your net (after-tax) salary used for housing + investing surplus.

Have a HECS/HELP debt HECS-HELP repayments come out of your salary once you earn over the threshold (2026-27: 15c/$1 over ~$69.5k, 17c/$1 over ~$130k, 10% flat above ~$186k). Check this if you still owe a HECS/HELP debt.

Property Price The purchase price of the property you're considering. Stamp duty is calculated automatically based on this price and your selected state.

Deposit Cash you'll put down upfront. Must be at least 20% of the property price to avoid Lenders Mortgage Insurance (LMI). E.g. on $800,000, a 20% deposit is $160,000. This calculator assumes no LMI — if your deposit is under 20%, real costs will be higher.

Current Savings Total cash you have right now. Deposit + stamp duty + upfront costs come out of this at settlement. Whatever remains is invested. If buying costs more than you have, the shortfall is an overdraft that compounds against you at the investment return rate — this is what makes buying unaffordable.

Interest Rate Annual variable interest rate. This is the nominal rate charged by the lender, compounded monthly. As of mid-2025, typical owner-occupier rates range 5.5%–6.5%. The calculator uses this to compute monthly repayments via the standard amortization formula.

Monthly Rent Current monthly rent you pay (or would pay). This is compared against the monthly mortgage payment. In the rent scenario, the difference between renting and buying costs is invested. Rent increases each year by the rent inflation rate.

Monthly Expenses All non-housing expenses: food, transport, utilities, insurance, entertainment, etc. This is used to calculate how much you can save/invest after all costs are covered.

Advanced Settings

Step 2

Loan Term (years) Standard Australian mortgage terms are 25–30 years. A longer term means lower monthly payments but more total interest paid.

Upfront Costs One-off purchase costs excluding stamp duty. Includes conveyancing, building & pest inspection, loan application fees, moving costs. Stamp duty is auto-calculated. Typical: $2,000–$5,000.

Property Growth Rate Annual capital growth of the property. Long-term Australian residential averages ~5–7% p.a., but varies wildly by city and timeframe. In the buy scenario, the property value compounds at this rate each year.

Rent Inflation How much rent increases each year. Historically, Australian rents grow ~2–4% p.a. This is applied annually to the monthly rent in the rent scenario.

Salary Growth Annual salary increase (promotions, CPI, experience). Without this, your salary stays flat for the entire projection while rent and costs inflate — which makes renting look artificially bad over long horizons. Typical: 2–4% p.a. (inflation + career progression). Applied each year to gross salary, then re-taxed at the progressive brackets.

Investment Return Expected annual return on invested savings. In the rent scenario, money saved (deposit + ongoing savings vs buying) is invested. Long-term ASX/shares average ~7–9% nominal. This compounds annually.

Property has strata / body corporate fees Strata fees cover building insurance, common area maintenance, and sometimes utilities. Typical for apartments and townhouses. Australian strata fees average $3,000–$8,000/year depending on building size and amenities. Enter as quarterly amount below.

Quarterly Strata Fee Enter your quarterly strata/body corporate levy. Check your section 32 or ask the agent. This is multiplied by 4 for the annual cost.

Annual Maintenance % of property value spent on maintenance each year. For standalone houses, budget ~1% of value. For strata properties, major structural maintenance is covered by strata fees, so 0.3–0.5% is more realistic for internal maintenance only.

Projection Years How many years to project the comparison. Longer horizons favor buying (equity builds, rent inflates). Shorter horizons (<5 years) often favor renting due to upfront costs.

Annual Council Rates Annual council rates for the property. Varies by LGA — typical $1,200–$2,500/year depending on property value and location.

Rent Strategy:

This is NOT your entire salary being invested. It's only the difference between what you'd spend buying vs renting each year. If buying costs $4,500/month and renting costs $2,500/month, then $2,000/month (the delta) gets invested in the rent scenario.

Invested: The monthly savings delta compounds at the investment return rate.

Cash: Savings sit as cash earning 0%. Compare both to see how much investment returns matter. In Cash mode, invested savings earn 0% in BOTH the rent and buy scenarios.

Net Worth Over Time

Equity vs Net Worth — what's the difference?

• Equity = Property value minus remaining loan balance. This is what you'd get from selling the property after paying off the mortgage.

• Net Worth = Equity minus all cash you've spent (stamp duty, mortgage interest, maintenance, strata, upfront costs). Net worth strips away the full purchase price, deposit, and principal repayments — it only credits capital growth and only counts real money out the door (interest, stamp duty, etc.). It's the true financial outcome.

• Equity always rises (property appreciates + principal paid down). Net worth can be negative early on because stamp duty and interest are sunk costs.

Buy vs Rent by Property Price

Net worth difference (Buy − Rent) after the projection years, sweeping the property price while every other input stays fixed. Above the zero line buying wins.

Real Costs Over Time

Sunk costs that never come back: stamp duty, interest, maintenance, strata, and accumulated rent.

Annual Cost Comparison

Year-by-Year Breakdown

How the Numbers Are Calculated

Rent or Buy Calculator — Compare financial outcomes of renting vs buying property in Australia.

Calculations are estimates only. This is not financial advice. Data updated quarterly.

@2026 rentorbuycalculator.com.au

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