Rent vs Buy Calculator
for Australians
Should you rent or buy in Australia in 2026? Run the maths on stamp duty, LMI, rent inflation, and your investment alternative side by side, then see the breakeven year where buying overtakes renting.
Quick answer: On the inputs shown, after 10 years a buyer's net home equity is $747,951 and a renter who invests the same capital is $665,273 β buying wins by $82,678. Buying overtakes renting in year 4. The calculator uses an NSW-style stamp duty sliding scale (~$27,540 on this purchase), automatic Lenders Mortgage Insurance when your deposit is under 20%, ongoing maintenance of 1% of the home's value per year, and assumes the renter invests both the upfront buy cost and any month where buying costs more than renting at the assumed return. Projections are illustrative β not predictions, forecasts, or financial advice.
π If you buy
LVR 80.0% Β· no LMI (20%+ deposit)
πIf you rent
Assumes the renter invests the deposit, stamp duty, and any monthly cash-flow savings.
After 10 years
Buying wins after 10 yearsBuyer net equity
$747,951
Home value minus loan balance
Renter investment portfolio
$665,273
Deposit + monthly savings, compounded
Difference (buy β rent)
+$82,678
Breakeven year 4
Year-by-year wealth comparison
| Year | Buy: net equity | Rent: portfolio | Buy β Rent |
|---|---|---|---|
| 1 | $216,293 | $239,008 | β$22,714 |
| 2 | $264,821 | $279,506 | β$14,685 |
| 3 | $315,694 | $321,589 | β$5,895 |
| 4 | $369,026 | $365,311 | +$3,716 |
| 5 | $424,941 | $410,727 | +$14,214 |
| 6 | $483,566 | $457,895 | +$25,670 |
| 7 | $545,034 | $506,874 | +$38,160 |
| 8 | $609,488 | $557,722 | +$51,765 |
| 9 | $677,075 | $610,501 | +$66,573 |
| 10 | $747,951 | $665,273 | +$82,678 |
| 15 | $1,157,709 | $971,251 | +$186,458 |
| 20 | $1,678,192 | $1,362,661 | +$315,531 |
| 25 | $2,340,226 | $1,911,203 | +$429,024 |
| 30 | $3,183,520 | $2,680,560 | +$502,960 |
Estimates use an NSW-style transfer-duty sliding scale. Use the Stamp Duty Calculator for an exact figure by state, including first-home concessions.
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This calculator runs a side-by-side projection of two scenarios over the horizon you choose. In the buying scenario, your deposit, stamp duty (estimated by sliding scale, similar to NSW transfer duty), Lenders Mortgage Insurance if applicable, and conveyancing costs are paid upfront. You then pay a fixed monthly mortgage repayment plus ongoing maintenance and rates estimated at 1% of the home's value per year. In the renting scenario, that same upfront capital is invested at your assumed investment return, and any month where the cost of buying exceeds the rent is also invested β keeping cash flow identical so the comparison is fair.
The home grows at your home appreciation rate, the loan balance falls each month as principal is repaid, and rent rises each year. The renter's portfolio compounds at your investment return rate. At each year mark, the calculator compares your net wealth in both scenarios: home equity (home value minus loan balance) for the buyer, and portfolio value for the renter. The breakeven year is the point where buying overtakes renting.
Why the result moves the way it does
Upfront costs dominate the early years. Stamp duty, LMI, and conveyancing usually total $30,000 to $80,000 for an Australian first home, which is why renting almost always wins in the first 2 to 4 years. Home appreciation and loan amortisation tilt the result toward buying over time β every month, more of the property is yours and rent inflation compounds against the renter. The investment-return assumption can flip the verdict on long horizons. A 9% expected return on shares often beats a 4.5% home growth rate, so an indexed-share-portfolio renter can keep pace with a buyer for surprisingly long.
How this calculator differs from a yield calculator
This is an owner-occupier model. You live in the home; there is no rental income to offset costs. If you are looking at an investment property β where rent flows in, interest is tax-deductible, and negative gearing may apply β use the Rental Yield Calculator or the Negative Gearing Calculator instead. For a precise stamp duty figure that handles every state and first-home-buyer concession, use the Stamp Duty Calculator.
Limits of any projection
Property markets cluster gains and losses. Interest rates move with the RBA cash rate. Investment returns can drop sharply in a single year. Life events β children, job changes, divorce, illness β reshape what a home is worth to you in ways no spreadsheet can capture. Treat the result as a thinking exercise, not a target, and verify any major decision with a licensed financial professional and a mortgage broker.
How to use this calculator
- Enter the home purchase price you are considering. Use a realistic figure for a property you would actually buy β comparable to the rental property you would otherwise live in. The default is set near the national median dwelling value, but adjust to your local market.
- Set your deposit. A 20% deposit removes Lenders Mortgage Insurance from the buying side of the comparison; anything less automatically applies an LMI estimate. Your deposit is also the capital that would be invested instead if you rented.
- Adjust the mortgage rate to match a current Australian owner-occupier rate (typically 6.0% to 6.5% p.a. in early 2026) and choose a 25 or 30 year loan term. The calculator amortises monthly principal and interest payments across the full term.
- Enter the weekly rent for an equivalent home. Use the actual rent you would pay for a comparable property in the same suburb β not a smaller place. Set the annual rent increase to reflect your expected market; nationally, advertised rents have grown around 8% in the past year, but a long-run figure closer to 4% to 5% is more defensible.
- Set your home appreciation assumption and your investment return assumption. To keep the comparison fair, these should be in the same ballpark β both nominal, both before tax. CoreLogic has Australian dwelling prices growing around 4% to 5% per year over long horizons; the ASX 200 has averaged around 9% nominal including dividends.
- Choose a time horizon β how many years you plan to stay in the home. Review the result: the difference card shows which scenario leaves you with more net wealth, and the year-by-year table reveals the breakeven year where buying overtakes renting.
β Frequently Asked Questions
Is it better to rent or buy a house in Australia in 2026?
It depends on your time horizon, your savings, the rent and price in your suburb, and the loan rate you can secure. As a rule of thumb, the longer you stay in the home and the higher you expect property to appreciate, the more buying wins. With variable owner-occupier rates around 6.0% to 6.5% p.a. and rent inflation running near 8% nationally, the breakeven horizon for most Australian capital cities currently sits in the 5 to 9 year range.
What costs should I include when comparing rent vs buy in Australia?
Buying costs include the deposit, stamp duty (varies by state β roughly 3% to 5% of the purchase price for owner-occupiers), Lenders Mortgage Insurance if your deposit is under 20%, conveyancing and inspections (~$2,000 to $3,000), mortgage repayments, council rates, strata or body corporate, insurance, and ongoing maintenance (a common estimate is 1% of property value per year). Renting costs are mostly rent itself plus contents insurance, but the deposit money you would have used to buy is invested instead and earns a return.
What is the breakeven point in a rent vs buy comparison?
The breakeven point is the number of years it takes for the total wealth from buying β your home equity (value minus loan balance) β to overtake the total wealth from renting β your invested deposit plus any monthly savings invested. Before breakeven, renting leaves you with more money. After breakeven, buying does. The shorter the horizon, the more upfront costs (stamp duty, LMI) dominate the comparison.
How does stamp duty affect rent vs buy in Australia?
Stamp duty is a large one-off cost that flips the early years strongly against buying. NSW, Victoria, and Queensland all charge transfer duty around 4% to 5.5% on owner-occupier purchases above $700,000, although first home buyer concessions and exemptions can reduce or eliminate it under various thresholds. The Richify Stamp Duty Calculator computes the exact figure for every state and territory. In a rent-vs-buy comparison, stamp duty effectively pushes the breakeven year out by 1 to 2 years for most buyers.
Does this calculator handle negative gearing?
This calculator models an owner-occupier scenario (the home is where you live), not an investment property. Negative gearing applies only when you rent a property out and your interest and holding costs exceed rental income β the loss can then offset other taxable income. For investment-property cash flow and tax modelling, use the Richify Negative Gearing Calculator or the Rental Yield Calculator instead.
What investment return assumption is reasonable if I rent?
A defensible long-run real return for a diversified portfolio of Australian and global shares is around 6% to 7% p.a. nominal after inflation. ASX index returns over the past 30 years have averaged near 9% nominal including dividends, but past returns do not guarantee future returns. For a fair comparison, the investment-return assumption should be close to the home-appreciation assumption, since they reflect long-run growth in different asset classes.
Why does buying win the longer I stay?
Three forces work in buying's favour over time. Property tends to appreciate, growing your equity. Your loan balance falls each month as you repay principal, so a larger share of the home's value is yours. And rent inflation compounds β what you pay in year 20 of renting is far higher than year 1. Combined, these usually overtake the higher upfront cost of buying somewhere between years 5 and 12, depending on inputs.
Should I include LMI in my calculation?
Yes, if your deposit is less than 20% of the purchase price. Lenders Mortgage Insurance is a one-off premium added to the loan or paid upfront, typically $5,000 to over $40,000 depending on LVR. This calculator includes a simple LMI estimate that activates automatically when the deposit drops below 20%. For an exact LMI premium, use the Richify LMI Calculator.
Does this projection account for inflation?
The figures shown are in nominal dollars β they include inflation rather than stripping it out. The home appreciation, rent growth, and investment return inputs you set should also be nominal. If you prefer a real-return view, lower each growth rate by your inflation assumption (currently around 3% to 3.5% in Australia) and the breakeven year will shift slightly later.
Is Richify available in Australia, and what does it cost?
Yes β Richify is available to download in Australia on the App Store and Google Play, and it is free to start. The app tracks your net worth across super, ASX shares, property, HECS, and crypto so you can stress-test rent-vs-buy decisions against your full financial picture, with Felix and the specialist AI agents.
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