Rent vs Buy Calculator

A rent vs buy calculator for Australian homes. Enter the rent, the purchase price, your upfront and ongoing costs, the loan, how fast you expect the home to grow and what your savings could earn, and it compares the two paths over time. Below the tool is what decides the answer: how long you stay and how fast the home grows, not the gap between this month’s rent and repayment. It also covers the South Australian Rent to Own program, which is a different choice from both.

Want a more accurate result?

Calculator results are estimates only. The answer moves with your growth assumption, your costs and how long you stay, and a broker can test it against a real loan and your real upfront costs.
No fee from us for arranging your finance. No obligation. Takes 2 minutes

What this calculator is modelling

A rent vs buy calculator runs two lives side by side from the same starting point. In one you rent and keep your money free. In the other you buy, pay the costs of buying and borrow. It needs four groups of inputs, and the last two are the ones people guess.

Rent and rent rises

The weekly rent you would pay and how fast you expect it to rise each year. Rent normally climbs, while a fixed rate repayment does not, which is why the gap between the two narrows over time.

Buying costs

The purchase price, the upfront costs on top of it, and the ongoing costs of owning such as council rates, water, insurance and maintenance, with a yearly increase. Renters do not pay these, so leaving them out makes buying look better than it is.

The loan

The amount borrowed, the term and the interest rate, which set the repayment. Most of the early repayments are interest, so the loan balance falls slowly at first.

Growth and what savings earn

How fast the home grows each year, and what the money you did not spend on a deposit could earn instead. These two numbers swing the result more than any other, and nobody can know them in advance.
Run the calculator at least three times: once with the growth you hope for, once with half of it, and once with very little. If buying only wins in the first run, the decision is resting on a hope rather than a number.

To test the borrowing side first, use the borrowing power calculator.

What actually decides rent versus buy

Most pages compare one repayment with one rent. The answer comes from somewhere else. Buying locks up a large lump sum, the deposit plus the upfront costs, and pays it back through home price growth and a loan balance that shrinks. Renting leaves that lump sum free to earn a return. Which wins depends mostly on how fast the home grows and how long you stay.

A fair comparison gives both paths the same budget. Whichever costs less in a given year puts the difference into savings.
Buyer’s position = home value − loan balance

Renter’s position = deposit and upfront costs invested + every year’s saving

Buying pulls ahead in the first year the buyer’s position is higher. Both sides spend the same amount each year, and whichever option costs less invests the difference.
Two things about that comparison are worth pausing on.

First, owning usually costs more each year at the start. In the worked example below it is $13,621 a year more, and the renter invests that gap. Because rent rises and the repayment does not, the gap closes.

Second, and this is where most published advice goes wrong, the answer is very sensitive to home price growth. The next section shows how much.

How long until buying pulls ahead?

Each card below takes one rate of home price growth and shows the year buying pulls ahead at five weekly rents. All of them use the same $650,000 home, a 20 per cent deposit and a 30 year loan at an assumed 6.25 per cent, with the other assumptions in the worked example further down. The five rents are 3.6 to 6.8 per cent of the price each year.

The first year shown ignores selling costs, the way most calculators do. The year in brackets adds selling costs of 3 per cent of the sale price. These figures are illustrative and are not a forecast for any suburb.

2 per cent a year growth

$450 a week  Yr 30+  (Yr 30+)
$550 a week  Yr 30+  (Yr 30+)
$650 a week  Yr 14  (Yr 17)
$750 a week  Yr 6  (Yr 9)
$850 a week  Yr 4  (Yr 5)

the year buying pulls ahead, and in brackets once selling costs are counted

3 per cent a year growth

$450 a week  Yr 30+  (Yr 30+)
$550 a week  Yr 13  (Yr 17)
$650 a week  Yr 6  (Yr 8)
$750 a week  Yr 3  (Yr 5)
$850 a week  Yr 3  (Yr 4)

the year buying pulls ahead, and in brackets once selling costs are counted

4 per cent a year growth

$450 a week  Yr 11  (Yr 14)
$550 a week  Yr 5  (Yr 7)
$650 a week  Yr 3  (Yr 5)
$750 a week  Yr 2  (Yr 4)
$850 a week  Yr 2  (Yr 3)

the year buying pulls ahead, and in brackets once selling costs are counted

5 per cent a year growth

$450 a week  Yr 4  (Yr 6)
$550 a week  Yr 3  (Yr 4)
$650 a week  Yr 2  (Yr 3)
$750 a week  Yr 2  (Yr 3)
$850 a week  Yr 2  (Yr 2)

the year buying pulls ahead, and in brackets once selling costs are counted

6 per cent a year growth

$450 a week  Yr 3  (Yr 4)
$550 a week  Yr 2  (Yr 3)
$650 a week  Yr 2  (Yr 3)
$750 a week  Yr 2  (Yr 2)
$850 a week  Yr 1  (Yr 2)

the year buying pulls ahead, and in brackets once selling costs are counted
Read down the $650 a week line. At 4 per cent growth buying pulls ahead in year 3, or year 5 once selling costs are counted. At 2 per cent growth the same rent takes until year 14, or year 17. At $450 a week and 2 or 3 per cent growth it does not happen within 30 years in this model.

The loan matters less than you might expect. At an interest rate one percentage point higher, 7.25 per cent, the year 3 result at 4 per cent growth moves to year 5.

A 4 per cent average can hide flat or falling years. That is why a short stay carries more risk than a table like this suggests.

Worked example: $650,000, two growth rates

The figures below are illustrative and are not a rate offer, a quote, or tax advice. They show how the arithmetic behaves.

Take a $650,000 home with a 20 per cent deposit ($130,000) and a loan of $520,000 at an assumed 6.25 per cent over 30 years. The repayment is about $3,202 a month.

Cash to get in
Deposit $130,000, South Australian stamp duty on an established home $29,580, and $3,500 for conveyancing, registration and inspections: $163,080.

Year one
Owning costs $47,421 ($38,421 in repayments plus $9,000 of rates, insurance and upkeep). Renting at $650 a week costs $33,800. The renter invests the $13,621 gap.

If the home grows 4 per cent a year (rent up 3 per cent, savings earning 4.5 per cent before tax)
Year 5: buyer $305,471, renter $269,728.
Year 10: buyer $524,123, renter $379,746. With 3 per cent selling costs the buyer is at $495,258, still ahead.

If the home grows 2 per cent a year
Year 10: buyer $354,310, renter $379,746. The renter is ahead by $25,436, or $49,206 once selling costs are counted. Buying does not pull ahead until year 14, or year 17.
Same home, same rent, same loan. Only the growth assumption changed, and the answer flipped.

That is why entering a growth rate you hoped for produces a result that means nothing. Buying wins on the higher number and loses on the lower one, so the honest answer is a range, not a figure. To see how the loan itself behaves, try the loan repayment calculator and the extra repayment calculator.

What the calculator does not show you

A rent vs buy figure is one input into a housing decision. These are the others, and every one of them can move the answer.

Selling costs

When you sell you typically pay an agent, advertising and legal costs, and a rent vs buy calculator compares values as if none of that existed. In the table above, 3 per cent of the sale price pushes the break-even back by one to four years. The property selling cost calculator puts a number on your own case.

Tax on both sides

A home you have lived in for the whole time you owned it is generally exempt from capital gains tax. Interest on the savings a renter builds is assessable income. The 2026-27 Federal Budget announced changes to capital gains tax on other assets from 1 July 2027 and left the main residence exemption unchanged. Taxing the renter’s 4.5 per cent return at 32 per cent, the 30 per cent bracket plus the Medicare levy, cuts it to about 3.06 per cent and lowers the renter’s year 10 position from $379,746 to about $337,683. Check your bracket on the Australian income tax calculator.

A third option: Rent to Own in South Australia

The SA Housing Trust’s Rent to Own program lets eligible buyers rent a new home at 75 per cent of market rent for around two years, with the purchase price locked in at the start. The rent does not count toward the price or the deposit. On a $650 a week home that is $487.50 a week, which leaves $8,450 a year to save. A locked price also protects you from rises while you save: at 4 per cent growth, two years is about $53,000 on a $650,000 home. You must live in South Australia, be an Australian citizen or permanent resident, have a job or run a business, meet HomeSeeker SA income and asset limits and not own property.

The cost of getting in

Upfront costs sit on top of the deposit and they do not come back. South Australian stamp duty on an established $650,000 home is $29,580. First home buyers of a new home, an off-the-plan apartment or vacant land may be eligible for stamp duty relief, but not on established homes. If you borrow more than 80 per cent of the price you will usually pay lenders mortgage insurance on top, which one guide puts at 1 to 3 per cent of the loan. The property buying cost calculator adds it all up.

Before you commit either way

Most rent vs buy calculators stop at one answer. Ask what growth rate it assumes, whether selling costs and tax are in, and how long you plan to stay. Then run it three times and look at the spread. If buying is ahead in all three, the case is strong. If it depends on the top number, you are being asked to bet on price growth, and that is a choice to make with your eyes open.
Related tools on this site: borrowing power calculator, property buying cost calculator, property selling cost calculator, savings goal calculator and the loan repayment calculator.

If you are ready to have the numbers checked against a real loan, see first home buyer loans, buying a home or home loans in Adelaide.
Sources
RevenueSA: Rate of stamp duty and Stamp duty relief for first home buyers, for the duty scale and who is eligible for relief.
SA Housing Trust: Rent to Own and HomeSeeker SA Rent to Own FAQ, and the 2026-27 State Budget housing package, for how the program works.
Australian Taxation Office: Capital gains tax and the main residence exemption, Investing in bank accounts and Tax rates for Australian residents.
Chartered Accountants Australia and New Zealand: Proposed capital gains tax changes, on the Budget changes and the main residence exemption.
Finder: Costs of buying a house or unit and NerdWallet: Costs of buying a house, for upfront costs and lenders mortgage insurance.
Australian Securities and Investments Commission: Media release 15-181MR, on the Moneysmart rent vs buy calculator for household goods.

About the figures on this page. Every break-even year and every position in the worked example was calculated from the assumptions stated here, on a yearly basis: repayments at monthly rests, rent up 3 per cent a year, ongoing costs of $9,000 up 3 per cent a year, savings earning 4.5 per cent before tax, and whichever option costs less investing the difference. Stamp duty of $29,580 is the RevenueSA scale applied to $650,000: $21,330 plus 5.50 per cent of the $150,000 above $500,000. The growth, rent and rate figures are illustrative assumptions, not forecasts or offers, and selling costs are added only where stated.
Important information. This page and calculator provide general information only. They are not credit, financial or tax advice and do not take your objectives, financial situation or needs into account. Results are estimates based on the figures you enter and the assumptions stated on this page. Home price growth, rents, interest rates, fees and government programs vary and change over time, and past growth does not predict future growth. Eligibility for stamp duty relief and for the South Australian Rent to Own program is set by the relevant government body, so check the current rules before you rely on them. Tax outcomes depend on your circumstances, so speak to a registered tax agent or accountant. Loanity is a credit representative and can provide credit assistance once we understand your situation.
STILL GOT QUESTIONS?

Rent vs buy questions, answered

Is it cheaper to rent or buy in Australia?

Renting usually costs less each year at the start, and buying tends to win over a longer stay if the home grows. In the worked example, owning costs $13,621 a year more than renting in year one, yet at 4 per cent growth buying pulls ahead in year 3. At 2 per cent growth it takes until year 14. The honest answer is a range, so run the calculator with a high, a middle and a low growth rate.

In the examples above, buying pulls ahead in years 2 to 5 at 4 per cent growth and $550 to $850 a week rent, and later at lower growth or lower rent. Selling costs add one to four years. Treat the table as a guide to the pattern rather than a prediction, because growth is rarely smooth and a short stay carries the most risk.

The deposit, stamp duty, conveyancing, mortgage registration and transfer fees, inspections, and lenders mortgage insurance if you borrow more than 80 per cent. In South Australia, stamp duty on an established $650,000 home is $29,580. A renter’s upfront cost is mainly a rental bond.

It is an SA Housing Trust program in which eligible buyers rent a new home at 75 per cent of market rent for around two years, with the purchase price locked in at the start. You then arrange a loan and buy. The rent does not go toward the price or deposit. You must live in South Australia, be an Australian citizen or permanent resident, be employed or run a business, meet HomeSeeker SA income and asset limits and not own property.

Not in the SA Housing Trust program. HomeSeeker SA says rental payments do not go toward the purchase price or deposit. The benefit is the reduced rent, which helps you save, and the price locked at the start. Private rent to own contracts vary widely, so read the terms and get independent legal advice before signing.

Generally no. The ATO says your main residence is exempt from capital gains tax if it has been your home for the whole time you owned it, has not been used to produce income and is on land of 2 hectares or less. The 2026-27 Federal Budget announced capital gains tax changes from 1 July 2027 for other assets and left the main residence exemption unchanged. Your accountant can confirm your position.

Yes. The ATO treats interest from a bank account as assessable income, taxed at your marginal rate. Most rent vs buy calculators ignore this, which flatters the renter. At a 32 per cent rate, the 30 per cent bracket plus the Medicare levy, a 4.5 per cent return falls to about 3.06 per cent. The Australian income tax calculator shows your bracket.

No. ASIC’s Moneysmart rent vs buy calculator compares renting with buying household goods such as appliances and furniture. This one compares renting a home with buying a home. If you were looking for goods, use Moneysmart’s tool. For a home, run this calculator.

There is no single figure. A deposit of at least 20 per cent avoids lenders mortgage insurance on most loans, and a smaller one costs more to borrow and leaves less cushion if rates or rents change. Stamp duty and other costs come on top of the deposit. The property buying cost calculator shows the full amount you need, and our first home buyer loans page covers how we help.

We do not charge you a fee for arranging your home loan. Brokers are generally paid a commission by the lender when the loan settles. Lenders may charge their own establishment, annual or package fees, and those are disclosed to you before you commit. If any fee from us would ever apply, you would be told in writing beforehand.