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🏠 Rent vs Buy Calculator

Compare renting vs buying over 1–10 years. Uses city-specific price forecasts from CBA and Westpac, and shows net wealth for both scenarios.

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Forecast Accuracy Note: Bank forecasts are only available for 2026–2027 (1–2 years). For the most accurate comparison based on real bank data, we recommend using 1 year. Longer timeframes use extrapolated estimates and become less reliable.
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Upfront cost buyers pay. Renters can invest this amount instead.

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How the rent vs buy calculation works

This calculator compares two parallel financial paths over the same time period:

The break-even point is the year when the buyer's net wealth overtakes the renter's HISA balance. Before that point, renting and saving is the financially optimal path. After it, buying wins.

Cash flow difference

The monthly mortgage payment and rent are rarely identical. This calculator accounts for the gap in both directions:

This symmetric treatment ensures neither scenario is unfairly penalised for cash flow differences.

Tax on savings interest

Interest earned in a High Interest Savings Account (HISA) is taxed at your marginal rate. Select your bracket to apply the correct after-tax return rate to the renter's HISA and any buyer surplus savings. For example, at 32.5%, a 5% gross rate becomes 3.375% after tax — significantly reducing compounding over longer periods. If you hold savings inside super, select 0% or 19% to approximate concessional tax rates.

About the forecasts

The city-specific growth rates are averages of published forecasts from CBA Economics and Westpac Economics as at early 2026. These banks diverge significantly — particularly for Melbourne in 2027, where CBA forecasts +3% and Westpac forecasts +6%. See our housing forecast explainer for a detailed breakdown of why they disagree.

Year 1 uses the 2026 average; year 2 onward uses the 2027 average. Forecasts are nominal (not adjusted for inflation).

What this calculator doesn't include

For simplicity, this calculator excludes several real costs that would reduce the buyer's net wealth position:

Including these costs would push the break-even point out by 2–5 years in most scenarios, strengthening the renting case for shorter time horizons.

🦘 Fun fact: Australia has one of the highest home ownership aspiration rates in the world, but actual ownership rates (65%) are lower than you'd expect. Many Australians who could buy choose not to — a concept popularised as "rentvesting": renting where you want to live, buying where the numbers stack up.

Frequently asked questions

Should I rent or buy in Sydney right now?

In Sydney, the maths strongly favours renting and investing for shorter time horizons (1–5 years). Sydney's median home price (~$1.4M) means a 20% deposit is $280,000 — capital that earns 5%+ in a high-interest savings account. Stamp duty alone adds $50,000–$70,000 upfront.

CBA and Westpac forecast Sydney property growth of 4–5% for 2026. Use the calculator above with your specific numbers to find your personal break-even point.

What factors affect the rent vs buy decision in Australia?

The key factors are: (1) Expected capital growth — higher growth favours buying; (2) Rent vs mortgage payment gap; (3) What your deposit earns if invested instead (HISA returns at 5%+); (4) Stamp duty and transaction costs — typically 5–6% of purchase price; (5) Time horizon — buying usually only wins after 5–10 years; (6) Your marginal tax rate, which affects after-tax savings returns.

Is it cheaper to rent or buy in Melbourne in 2026?

Melbourne is unusual — prices have been soft since 2022, while rents have risen sharply. Bank forecasts for 2026–27 range from +3% (CBA) to +6% (Westpac). For a typical Melbourne property at ~$900,000, renting and investing your deposit often produces a better 1–3 year outcome. Buying becomes more competitive if you hold 7+ years and growth hits the higher forecasts.

What is the break-even point for renting vs buying?

The break-even point is the year when the buyer's net wealth (property equity) overtakes the renter's invested savings portfolio. In Australian capital cities, this is typically 5–12 years, depending on property growth, stamp duty paid, and the interest rate environment. At high rates (6%+), renter savings compound faster, pushing the break-even out. In regional areas with stronger yields and lower prices, buyers break even sooner.

What is rentvesting and does it make financial sense?

Rentvesting means renting where you want to live while owning an investment property where the numbers stack up. It makes sense when: you want to live in an expensive area that's unaffordable to buy in; an investment property in a cheaper market offers better yield and growth; and you can claim negative gearing deductions. Australia's tax system makes rentvesting particularly attractive.

See our complete guide to rentvesting in Australia.

How does stamp duty affect the rent vs buy decision?

Stamp duty is one of the biggest costs buyers face — typically $20,000–$70,000 on median Australian properties. Renters avoid this entirely and can invest it instead. At 5% p.a., $40,000 in stamp duty grows to $64,420 after 10 years — which buyers must recover through property appreciation just to break even on this one cost. Enter your stamp duty above (or use our Stamp Duty Calculator) to see the full impact.

Should I use 'match mortgage' or 'save the difference' as a renter?

Match mortgage is the fairer comparison — you're putting the same monthly amount toward wealth in both scenarios, and measuring which path builds more. Save the difference only banks the gap between rent and the mortgage, which can understate renter wealth-building if rent is much cheaper. For a true financial comparison, use match mortgage. For a real-world lifestyle scenario where you'd spend the difference, use save the difference.

You might also need:

💰 Mortgage Calculator 🏠 Stamp Duty 🛡️ LMI Calculator 🏦 Borrowing Capacity