Rent vs Buy Calculator Australia
Compare the long-term wealth outcome of buying a property vs renting and investing the difference. Adjust every assumption to match your situation.
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How to Use This Calculator
Tab "Rent vs Buy"
Enter the property price, weekly rent for a comparable property, and your deposit. Under "More options," adjust the mortgage rate, property growth rate, investment return (what the renter earns on their portfolio), stamp duty, and years to compare. The calculator models both scenarios year by year and shows net wealth, break-even year, and monthly costs.
Tab "Cash Flow"
See the monthly outflow for buying (mortgage + rates + insurance + maintenance + strata) vs renting (rent + insurance). The surplus โ the difference between buying and renting costs โ is what the renter can invest each month. Under "More options," fine-tune maintenance rate, council rates, strata, and rent growth.
Tab "Sensitivity"
See how changing one assumption at a time affects the outcome. The calculator tests: property growing at 3% instead of your default, rent growing at 5%, and mortgage rate rising by 1%. It shows which assumption has the biggest impact on whether buying or renting wins.
The Formulas
Property value (year N) = Price x (1 + growth rate)^N
Remaining loan = standard amortisation formula over 30 years
Net wealth = Property value - Remaining loan
Net wealth โ Renting + Investing:
Initial investment = Deposit + Stamp duty (saved by not buying)
Monthly surplus = Buying costs - Renting costs
Portfolio grows at investment return rate, surplus added monthly
Net wealth = Portfolio value at year N
Monthly mortgage repayment (P&I):
M = P x [r(1+r)^n] / [(1+r)^n - 1]
where P = loan amount, r = monthly rate, n = total months
Monthly buying costs:
Mortgage P&I + Maintenance (1-1.5% of value/12) + Council rates/12 + Insurance/12 + Strata/12
Break-even year:
First year where net wealth buying > net wealth renting
All projections use compound growth. Property growth applies to the full property value (leveraged returns). Investment returns apply to the renter's portfolio. Rent grows annually at the specified rate. The model does not account for tax implications (capital gains, negative gearing, dividend tax) or transaction costs on property sale.
Example
Alex and Jamie โ Couple in Brisbane, comparing a $650K house vs renting at $500/week
Deposit: $130,000 (20%). Stamp duty: $15,000. Mortgage rate: 6.2%. Property growth: 7%. Investment return: 8%. 10-year comparison.
In this Brisbane scenario, buying overtakes renting by year 5 due to strong 7% property growth and leverage (the full $650K property grows, not just the $130K deposit). If property growth were only 4%, renting would stay ahead for the full 10 years.
Australian Property Market Assumptions
| Assumption | Typical Range | Default Used |
|---|---|---|
| Property growth (capital cities) | 5-8% p.a. long-term | 6% |
| ETF/shares return | 7-10% p.a. long-term | 8% |
| Mortgage rate | 5.5-7.5% (2024-26) | 6.2% |
| Rent growth | 3-5% p.a. | 4% |
| Maintenance | 1-1.5% of property value/yr | 1.2% |
| Council rates | $1,500-$3,000/yr | $2,000 |
| Strata (units) | $3,000-$8,000/yr | $0 (house) |
| Building insurance | $1,500-$2,500/yr | $1,800 |
| Contents insurance (renter) | $300-$600/yr | $400 |
| Loan term | 25-30 years | 30 years |