Guide
Rent vs mortgage repayments: how much of the loan does rent cover?
For a median-priced house in each capital, bought with a 20% deposit at an investor rate of 7.35%, how the typical weekly rent compares with the weekly repayment.
By Mossy Taheri, licensed buyer’s agent · Updated
The short answer
At 7.35% with a 20% deposit, rent on a median-priced house covers about 74% of the repayment in Darwin, but only about 46% in Sydney. In no capital does the typical rent cover the full principal and interest repayment.
Rent vs repayments in every capital
| City | Median house | Weekly rent | Repayment (P&I) | Rent covers | Repayment (interest only) |
|---|---|---|---|---|---|
| Darwin | $747,252 | $700 | $950 | 74% | $845 |
| Hobart | $790,406 | $627 | $1,005 | 62% | $894 |
| Perth | $1,017,734 | $732 | $1,295 | 57% | $1,151 |
| Canberra | $1,006,269 | $692 | $1,280 | 54% | $1,138 |
| Melbourne | $915,119 | $622 | $1,164 | 53% | $1,035 |
| Adelaide | $990,531 | $641 | $1,260 | 51% | $1,120 |
| Brisbane | $1,146,078 | $696 | $1,458 | 48% | $1,296 |
| Sydney | $1,466,060 | $849 | $1,865 | 46% | $1,658 |
Funding the gap
- The difference between rent and repayments, plus rates, insurance, management and maintenance, comes from your income.
- From 1 July 2027, losses on established property bought after 12 May 2026 can't reduce tax on your salary, so the gap costs more after tax than it used to.
- A larger deposit, a lower-priced market or a higher-yield property all narrow the gap.
See how interest-only and P&I loans compare. Model a specific property with our cash flow calculator, and see how much you can borrow now.
How we worked it out
Median house values from Cotality (September 2026) and typical house rents from our own analysis (September 2026). Loan of 80% of the median, 30 years, at 7.35%, our investor-rate assumption explained on the borrowing capacity page. Weekly repayment is the monthly repayment × 12 ÷ 52. Updated 6 November 2026. General information only, not financial advice.
- Cotality Home Value Index, October 2026 release (values to 30 September 2026)
- ABC News, RBA lifts the cash rate to 4.85%, 3 November 2026
- Savings.com.au, big four banks pass on the rise from 13 November 2026
- Australian Broker News, Canstar average variable rate 6.84%, 27 October 2026
Cite this page: Rising Returns, “Rent vs Mortgage Repayments in Every Capital, 2026”, updated 6 November 2026, https://risingreturns.com.au/rent-vs-repayments/
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Book a free discovery callRent vs repayments: common questions
In which capital does rent cover the most of the mortgage?
Darwin. The typical house rent of about $700 a week covers about 74% of the principal and interest repayment on a median-priced house with a 20% deposit. In Sydney it covers about 46%.
Is it normal for rent not to cover the mortgage?
Yes, in most capitals at today's rates. The gap, plus costs such as rates, insurance and management, is what you fund from your income. That's why investors look at cash flow, not just the purchase price.
Does an interest-only loan change the picture?
It lowers the repayment because you pay no principal, so rent covers more of it. But the debt doesn't fall, interest-only periods end, and lenders may charge a higher rate. The table shows both.
General information only. It doesn’t consider your personal circumstances and isn’t financial, tax, credit or legal advice. Speak to a licensed professional before you act.