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Compare the long-term costs of renting and buying a home based on your rent, home price, mortgage, ongoing costs and time frame.

Rent vs Buy Calculator

How to Use This Rent vs Buy Calculator

Use the calculator to compare the estimated cost of renting with the cost of buying a home over your chosen time period.

Step-by-Step

1. Enter your monthly rent
Add the amount you currently pay, or expect to pay, each month to rent a comparable home.

2. Enter the home price
Add the purchase price of the property you are considering.

3. Enter your down payment
Enter the amount you plan to contribute upfront toward the home purchase.

4. Enter the mortgage interest rate
Add the estimated annual interest rate for the home loan.

5. Choose your loan term
Select how many years you expect to take to repay the mortgage, such as 15, 20, or 30 years.

6. Choose how many years to compare
Select the period over which you want to compare renting and buying, such as 5, 10, or 20 years.

7. Estimate annual home costs
Enter an estimated percentage of the home's value for ongoing ownership costs such as maintenance, insurance, property taxes, rates, or similar expenses.

8. Enter the expected annual rent increase
Estimate how much your rent may increase each year.

Understanding Your Results

The calculator updates automatically and shows:

Estimated Rent Cost — the projected rent paid over your selected comparison period.
Estimated Buying Cost — estimated mortgage interest plus ongoing home ownership costs.
Monthly Mortgage — your approximate monthly principal-and-interest mortgage payment.
Initial Loan Amount — the home price minus your down payment.
Estimated Cost Difference — the difference between the calculated renting and buying costs.

The calculator will also indicate which option has the lower estimated housing cost based on the figures you entered.

💡 Try Different Scenarios

Change one assumption at a time to see how the result moves. For example, try a different rent amount, down payment, mortgage rate, comparison period, or annual home cost.

A small change in your assumptions can produce a very different result, so use the calculator as a comparison tool rather than as a prediction of exactly what will happen.

The results are estimates for general informational purposes only and do not include every possible cost or financial factor associated with renting or buying.

white and red wooden house miniature on brown table

What Is a Rent vs Buy Calculator?

A Rent vs Buy Calculator helps you compare the estimated financial cost of renting a home with the cost of buying one over a selected period of time.

Instead of looking only at the monthly rent or mortgage payment, the calculator considers several factors that can affect the comparison, including your monthly rent, home price, down payment, mortgage interest rate, loan term, ongoing home ownership costs, and expected rent increases.

For example, buying a home may involve higher upfront costs and ongoing ownership expenses, while renting may require less money upfront but can become more expensive over time if rent continues to increase.

The calculator combines these figures to estimate:

the total projected cost of renting
the estimated cost of buying
your approximate monthly mortgage payment
your initial loan amount
the estimated difference between the two options

Is Renting or Buying Better?

There is no single answer that works for everyone.

Renting may offer more flexibility and require less money upfront, while buying can provide long-term stability and the opportunity to build home equity through principal repayments.

The result can also change significantly depending on how long you plan to stay in the home, the interest rate on your mortgage, your down payment, ongoing ownership costs, and how quickly rent increases.

Use the calculator above to test different scenarios and see which option has the lower estimated housing cost based on your assumptions.

Keep in mind that a calculator cannot capture every financial or lifestyle factor involved in deciding whether to rent or buy. Your plans, savings, job flexibility, location, maintenance responsibilities, and personal preferences can all affect the decision.

Renting vs Buying: What Should You Consider?

Deciding whether to rent or buy a home involves more than comparing your monthly rent with a mortgage payment. Each option comes with different costs, benefits, risks, and levels of flexibility.

Renting a Home

Renting may require less money upfront and can make it easier to move if your work, family, or lifestyle changes.

Potential advantages of renting include:

Lower upfront costs
Greater flexibility to move
Fewer maintenance responsibilities
No direct exposure to property price changes
More savings potentially available for other financial goals

However, rent may increase over time, and your monthly payments generally do not build ownership in the property.

Buying a Home

Buying usually requires more money upfront for a down payment and other purchase costs, but mortgage principal repayments can gradually build home equity.

Potential advantages of buying include:

Building equity through principal repayments
Greater stability and control over your home
Less exposure to future rent increases
Potential benefit if the property's value rises over time
The possibility of eventually owning the home without a mortgage

Homeowners also need to consider mortgage interest, insurance, taxes or local property charges, maintenance, repairs, and other ongoing ownership expenses.

The Time Frame Matters

How long you expect to stay in the property can have a major impact on the rent vs buy decision.

Buying involves upfront and ongoing costs that may be harder to justify over a short period. Over a longer period, however, paying down a mortgage can build more equity while a renter may continue facing increasing rental costs.

There is no universal point at which buying automatically becomes better than renting.

There's No One Right Answer

The better option depends on your income, savings, housing costs, mortgage rate, down payment, expected length of stay, lifestyle, and financial goals.

Someone who values flexibility may prefer renting even when buying appears financially competitive. Someone planning to remain in the same home for many years may place greater value on the stability and equity-building potential of home ownership.

Use the Rent vs Buy Calculator above to compare the numbers, but consider the financial results alongside your personal circumstances and longer-term plans.

Renting vs Buying: What Should You Consider?

Many first home buyers underestimate the full cost of buying a property. Beyond the purchase price and deposit, there are several significant upfront and ongoing costs to factor into your comparison.

Upfront costs of buying:

Stamp duty is one of the largest upfront costs and varies significantly by state. On a $750,000 property in NSW, stamp duty alone can be over $28,000 for non-first home buyers. Use our Stamp Duty Calculator to estimate this for your state.

Conveyancing and legal fees typically add another $1,000 to $2,500. Building and pest inspections cost between $300 and $600. Loan application fees, lenders mortgage insurance (if your deposit is below 20%), and moving costs can add thousands more.

Ongoing costs of owning:

Once you own a property, you are responsible for all maintenance and repairs — costs that renters do not face. Council rates, water rates, home and contents insurance, and body corporate fees (for apartments) are all ongoing expenses. These can easily add up to $5,000 to $15,000 per year depending on the property type and location.

Opportunity cost of the deposit:

The money tied up in your deposit and upfront costs could alternatively be invested elsewhere. This is known as the opportunity cost of buying — the potential return you give up by using that money for a property purchase rather than investing it in shares or other assets.

The True Cost of Renting

Renting is sometimes described as “throwing money away,” but the comparison is more complicated. While rent payments do not build home equity, renting can offer financial advantages depending on your circumstances.

Lower upfront costs
Renting generally requires much less money upfront than buying a home. Buying may require a substantial down payment, closing or purchase costs, and other fees. Renting can allow you to keep more of your savings available for emergencies, investing, or other financial goals.

Greater flexibility
Renting can make it easier to move for work, family, lifestyle changes, or other opportunities without having to sell a property. This flexibility can be particularly valuable if you are unsure how long you plan to stay in one location.

Fewer ownership expenses
Renters are generally not responsible for many of the major costs associated with owning a property, such as structural repairs and some ongoing property expenses. Homeowners need to budget for maintenance, repairs, insurance, taxes or local charges, and other ownership costs.

Rent can increase over time
One of the biggest financial uncertainties of renting is that your housing cost may rise. Even relatively small annual rent increases can add up significantly over 10, 20, or 30 years.

Renting does not build home equity
Unlike mortgage principal repayments, rent payments do not increase your ownership of an asset. However, this does not automatically mean buying is financially better. The outcome depends on the cost of the home, mortgage interest, ownership expenses, rent increases, and how long you remain in the property.

The Rent vs Buy Calculator accounts for annual rent increases, allowing you to test how different assumptions may affect the estimated long-term cost of renting compared with buying.

Modern, stylish living room with open concept kitchen

Key Factors That Affect Rent vs Buy Costs

The result of a rent vs buy comparison can change significantly depending on the assumptions you enter. Here are some of the most important factors to consider:

How long you plan to stay
The length of the comparison period can make a big difference. Renting may have lower upfront commitments, while buying may become more competitive over a longer period as mortgage principal is repaid and home equity builds.

Your monthly rent
Higher rent increases the long-term cost of renting. If your current rent is relatively low compared with the cost of buying a similar home, renting may appear more affordable over the comparison period.

Rent increases
Even modest annual rent increases can add up over time. The calculator lets you adjust the expected annual rent increase to see how rising rents may affect the comparison.

Mortgage interest rate
A higher mortgage rate generally means more interest paid, increasing the estimated cost of buying. A lower rate reduces the interest portion of your mortgage payments and can make buying more financially competitive.

Your down payment
A larger down payment reduces the amount you need to borrow. This can lower your monthly mortgage payment and reduce the amount of interest paid over time.

Home ownership costs
Buying a home involves expenses beyond the mortgage. Depending on where you live, these may include property taxes or rates, insurance, maintenance, repairs and other ongoing costs. The calculator allows you to estimate these as a percentage of the home's price.

The price of the home
A more expensive property generally requires a larger loan and can increase both mortgage interest and ongoing ownership costs. Comparing homes at different price points can produce very different rent vs buy results.

Small Changes Can Make a Big Difference

There isn't one set of assumptions that works for everyone. Try changing one input at a time in the Rent vs Buy Calculator to see which factors have the greatest effect on your result.

How Location Changes the Rent vs Buy Decision

Where you live can have a major impact on whether renting or buying appears more affordable. Home prices, rents, mortgage costs, taxes, insurance and other ownership expenses can vary significantly between cities and regions.

High-cost housing markets
In areas where home prices are high compared with rents, buying may require a much larger down payment and mortgage. Renting can sometimes have a lower estimated cost, particularly over shorter comparison periods.

Lower-cost housing markets
Where home prices are relatively affordable compared with local rents, the financial gap between renting and buying may be smaller. A lower purchase price can also reduce the loan amount, mortgage interest and some ongoing ownership costs.

Local rental costs
Two locations with similar home prices can have very different rental markets. Higher monthly rent can make renting considerably more expensive over time, especially when annual rent increases are included.

Home ownership costs vary by location
Property taxes, local rates, insurance, maintenance and other expenses can differ depending on where the property is located. These costs should be considered alongside the mortgage payment when comparing buying with renting.

Your time frame matters too
Location alone does not determine whether renting or buying is better. How long you expect to stay, your down payment, mortgage rate, rent and ongoing ownership costs can all change the result.

Compare Your Own Location

Rather than relying on a general rule for a particular city or country, enter local rent and home price figures into the Rent vs Buy Calculator. This gives you a comparison based on the housing costs that are more relevant to your situation.

top-view photography of houses at daytime

Frequently Asked Questions

1. Is it better to rent or buy a home?

There is no single answer for everyone. Renting may offer lower upfront costs and greater flexibility, while buying can provide stability and allow you to build home equity. The better option depends on factors such as home prices, rent, mortgage rates, your down payment, ongoing ownership costs, and how long you plan to stay.

2. How does the Rent vs Buy Calculator work?

The Rent vs Buy Calculator compares the estimated cost of renting with the estimated cost of buying over a period you choose. It uses your monthly rent, home price, down payment, mortgage interest rate, loan term, annual home costs, and expected rent increases to estimate the difference.

3. What costs should I consider when buying a home?

In addition to your down payment and mortgage, home ownership can involve property taxes or local rates, insurance, maintenance, repairs and other ongoing expenses. There may also be one-time purchase or closing costs depending on where you live.

4. Does renting mean I am wasting money?

Not necessarily. Rent pays for housing and can provide flexibility without many of the costs and responsibilities of home ownership. While renters do not build home equity through their rent payments, they may have more money available for savings, investing or other financial goals.

5. How does a larger down payment affect buying?

A larger down payment reduces the amount you need to borrow. This can lower your monthly mortgage payment and reduce the amount of interest you pay. However, using more savings for a down payment also means having less money available for emergencies and other goals.

6. How do rent increases affect the comparison?

Rent increases can significantly affect the long-term cost of renting. Even relatively small annual increases can compound over many years. You can adjust the annual rent increase in the calculator to see how different assumptions change the result.

7. How long should I plan to stay before buying makes sense?

There is no universal number of years. Buying generally involves more upfront costs and financial commitments, so the length of time you expect to stay can influence the comparison. Try different comparison periods in the calculator to see how the estimated costs change.

8. Does this calculator tell me whether I should rent or buy?

No. The calculator provides an estimated financial comparison based on the numbers you enter. It does not account for every cost, future property values, investment returns, taxes or personal circumstances. Your lifestyle, job flexibility, savings, future plans and preference for renting or owning should also be considered.

Run the Numbers Before You Decide

Choosing whether to rent or buy a home is about more than finding the option with the lowest estimated cost. Your savings, lifestyle, future plans, financial flexibility, and how long you expect to stay in one place can all influence the decision.

Use the Rent vs Buy Calculator as a starting point to compare different scenarios. Try changing your rent, home price, down payment, mortgage rate, comparison period, and ongoing ownership costs to see how each assumption affects the result.

Once you have a clearer picture, you can use our other free calculators to explore your next steps, including:

Down Payment Calculator — estimate how much you may need upfront.
Mortgage Calculator — estimate your potential mortgage repayments.
House Affordability Calculator — explore how much home may fit your budget.
Borrowing Power Calculator — estimate how much you may be able to borrow.

Disclaimer

This calculator provides estimates for general informational and educational purposes only. Results are based on the information and assumptions you enter and may not reflect all costs associated with renting or buying a home. It is not financial, lending, tax, legal, or investment advice. Consider your circumstances and seek appropriate professional advice before making major financial decisions.

Watch: Rent vs Buy Explained

Not sure what the numbers mean? Watch our Rent vs Buy video for a simple example of how renting and buying can lead to very different financial outcomes.