Free investor tool
Rent vs buy calculator
Compare two paths: buying a home to live in, or renting and investing your deposit and any monthly savings instead. See which leaves you better off under your assumptions.
Updated · Free, no sign-up
| Year | Buying | Renting and investing | Difference |
|---|---|---|---|
| 1 | $221,552 | $280,389 | −$58,837 |
| 2 | $279,744 | $325,151 | −$45,408 |
| 3 | $340,977 | $371,878 | −$30,902 |
| 4 | $405,411 | $420,665 | −$15,254 |
| 5 | $473,217 | $471,612 | $1,605 |
| 6 | $544,572 | $524,827 | $19,745 |
| 7 | $619,664 | $580,420 | $39,243 |
| 8 | $698,689 | $638,512 | $60,178 |
| 9 | $781,858 | $699,225 | $82,632 |
| 10 | $869,388 | $762,694 | $106,694 |
How it works
How the comparison works
The buyer pays the deposit and purchase costs, then loan repayments and ownership costs each month, and owns the home's equity at the end, less selling costs. The renter invests the same deposit and purchase costs on day one, pays rent, and invests any month where renting is cheaper than owning. If owning is cheaper in a given month, the buyer invests the difference instead, so both sides spend the same each month.
The answer is very sensitive to the growth rate of the home, the return on investments and rent increases. It also leaves out tax, which differs between a home and other investments, and the non-financial side of owning or renting. Rentvesting, renting where you want to live and buying an investment property elsewhere, is a third option many first-time buyers consider.
The numbers are one part of the decision
We look at the figures alongside growth drivers, vacancy, supply and how a property fits your borrowing and portfolio plans, then choose the market that suits your strategy, wherever it is in Australia. See how we buy investment property.
FAQ
Common questions
Is it better to rent or buy in Australia?
It depends on prices and rents where you want to live, how long you plan to stay, interest rates, and what return you could earn by investing instead. The calculator shows the trade-off under the assumptions you enter.
What is rentvesting?
Renting the home you live in and buying an investment property somewhere else, usually where prices, rents and growth prospects suit your budget better.
Why does the result change so much with the growth rate?
Both the home and the investments compound over many years, so a one percentage point difference in either rate can swing the result by a large amount.
Is this financial advice?
No. It is a general estimate to help you compare options. It does not consider your personal circumstances, and results depend on the figures you enter. Check them with your accountant, mortgage broker or financial adviser before you act.
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