Rent vs Buy Calculator Australia

Buying

Monthly repayment$4,045.24
Stamp duty (est. 4%)$32,000.00
Total repayments paid$485,428.24
Total cost of buying$677,428.24
Property value at end$1,184,195.43
Equity at end$641,628.22
Net buying position$124,199.98

Renting

Total rent paid$385,186.34
Deposit investment return (7% p.a.)$154,744.22
Net renting position-$230,442.13

Verdict

Buying is better

Difference$354,642.10

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Should I rent or buy in Australia?

Whether to rent or buy depends on your location, deposit size, and how long you plan to stay. In high-growth cities like Sydney and Melbourne, buying can build significant equity over time. However, renting offers flexibility and lets you invest your deposit elsewhere. If you plan to stay for 7+ years and have a solid deposit, buying often makes financial sense. Use this calculator to compare both options for your specific situation.

How much deposit do I need to buy a house in Australia?

Most lenders require at least a 20% deposit to avoid Lenders Mortgage Insurance (LMI). With a 20% deposit on an $800,000 property, you would need $160,000 upfront. Some lenders accept a 5–10% deposit, but you will pay LMI, which can add tens of thousands of dollars to your loan. First home buyers may also be eligible for government schemes that allow smaller deposits.

What is stamp duty and how much will I pay?

Stamp duty (also called transfer duty) is a state-based tax on property purchases. Rates vary by state but are roughly 3–5% of the property price. For example, on an $800,000 property in NSW you would pay approximately $31,335. First home buyers in most states receive concessions or exemptions up to certain price thresholds. This calculator uses a simplified estimate of 4%.

Is it better to invest the deposit or buy a house?

It depends on property growth versus investment market returns. Historically, Australian property has returned around 4–7% per year in major cities, while a diversified share portfolio has returned around 7–10%. If property growth is low in your area, investing your deposit in the share market may leave you better off. This calculator shows both scenarios side by side using a 7% annual return assumption for the invested deposit.

How is the rent vs buy comparison calculated?

The calculator computes your monthly mortgage repayment using the standard principal and interest formula. For buying, it tracks equity (property value minus remaining loan balance) and subtracts all costs (deposit, stamp duty, and all repayments made). For renting, it assumes your deposit is invested at 7% per year and deducts the total rent paid with annual increases. The net position for each option is compared to determine which is financially superior over the chosen time period.