Rent versus buy calculator

The question is not only "is rent money wasted?" It is whether, over a period you can realistically stay put, the cash you would put into a purchase, plus the ongoing costs of owning, leaves you better or worse off than renting and investing the difference. A repayment is not the same thing as rent, and a rising property price is an assumption, not a fact.

Never Lose Interest includes a rent versus buy calculator for housing. Use this page to understand the inputs, and to avoid comparing the wrong numbers. ASIC's Moneysmart has a "Rent vs buy calculator", but that tool is for household goods, such as furniture, not for a house or apartment. Moneysmart's "Buying a house" guidance, last updated 14 October 2026, is still the official consumer starting point for the purchase side.

This explainer sits with the stamp duty, mortgage repayment, borrowing power, land tax, main residence CGT exemption, offset versus extra repayments, First Home Super Saver and Age Pension and super guides.

This is general information only. It is not personal advice, and it is not a forecast of property prices or rents.

Why is a repayment not a fair comparison with rent?

A mortgage repayment is part interest and part principal. The principal is money you are putting into an asset you own, not a cost in the same sense as rent. Interest, rates, insurance, maintenance and strata are costs. If you compare rent only with the full repayment, buying will often look more expensive than it is, or cheaper than it is, depending on the interest rate and the term.

A useful comparison is after-tax cash flow, year by year, plus the net wealth you would have at the end of the period under each path:

• buying: you have equity in the property, after selling costs if you sell, and you have had the housing costs of ownership
• renting: you have no equity in that property, you have paid rent, and you may have invested the deposit and the extra cash that ownership would have absorbed

The result depends heavily on how long you stay, what happens to rents and prices, and what return you assume on money that is not tied up in a home. Those last items are assumptions you choose. They are not predictions, and a calculator cannot make them true.

What costs belong on the buying side?

Upfront costs typically include:

• the deposit
• stamp duty or transfer duty, unless a first-home or other concession applies
• legal and conveyancing fees
• building and pest inspections
• lenders mortgage insurance if the deposit is under 20%
• moving costs

Moneysmart's buying guidance is that a 20% deposit, plus stamp duty, legal fees and inspections, helps you avoid LMI. Pre-approval is not a guarantee that the loan will be made at settlement.

Ongoing costs typically include:

• mortgage interest, which changes if the rate is variable
• council rates
• water and other utilities you would also often pay as a renter, so be consistent
• building and contents insurance, and landlord insurance is not the relevant cover for a home you live in
• maintenance and repairs
• strata or owners corporation levies, if the property is a unit
• land tax, usually not on a home that is your principal place of residence, but relevant if you later rent the property out or if you also own other land

Maintenance is a real cost, but any percentage of the property value you type into a calculator is a modelling assumption, not an official figure. Older houses and units with special levies can cost more than a tidy percentage implies.

If the comparison period ends with a sale, include selling costs, such as agent commission and legal fees, and remember that a main residence is generally exempt from CGT if you meet the exemption rules. Interest on a loan for the home you live in is not tax deductible.

The First Home Super Saver Scheme can help some first buyers use voluntary super contributions toward a deposit. It does not remove stamp duty or LMI, and it has its own caps and conditions.

What costs belong on the renting side?

Rent is the main outgoing. It can rise at the end of a lease, or sooner if the agreement allows it. A bond is usually returned, so it is a cash timing item more than a long-term cost, unless deductions are made.

Renters typically do not pay land tax, council rates or building insurance, though some leases pass on particular charges, and contents insurance is still worth considering. They also do not build equity in the property, and they can usually move with less friction than a seller.

The opportunity cost is easy to skip and hard to measure. The deposit, stamp duty and other upfront costs, plus any annual gap between ownership costs and rent, could be invested if you rent. The return you assume for that money will change the result. A high assumed return makes renting look better. A low one, or a long period of strong property growth, makes buying look better. Neither is a forecast.

What should a rent versus buy calculator ask for?

A housing calculator on Never Lose Interest should let you set, and then test, at least:

• purchase price, deposit and loan interest rate and term
• stamp duty, using the figures in the stamp duty guide, plus other upfront costs
• weekly or monthly rent, and an assumed rent increase
• rates, insurance, maintenance and strata
• an assumed rate of property price growth
• an assumed after-tax return on money invested if you rent
• a time horizon, and selling costs if you exit at the end
• your marginal tax rate, if the model shows after-tax cash flows

Change one assumption at a time. If buying only wins when prices grow at a high rate and you stay for a long time, that is useful information. If renting only wins when the investment return is ambitious, that is useful too. Do not treat a single default scenario as the answer.

Time horizon matters more than most people expect. Stamp duty, inspections, LMI and selling costs are heavy in the first few years. A move after two or three years can leave a buyer behind a renter even if the property has risen, because those costs have not been spread over a long hold. A decade in the same home changes the arithmetic.

How do tax and the Age Pension fit in?

For a home you live in, mortgage interest is not deductible, and a later sale is generally free of CGT if the main residence exemption applies. If you later rent the property, the 6-year absence rule and partial exemption rules in the main residence guide matter, and land tax can start.

If you are approaching Age Pension age, the principal home is generally exempt from the assets test, which can make owning a home more valuable than the same equity held in other assets. That is a separate question from the cash-flow comparison, and the rules are in the Age Pension and super guide. It is not a reason, on its own, to buy a more expensive house than you need.

This page does not conclude that buying is always better, or that renting is always better. Location, job mobility, relationship plans, the state of the rental market and your appetite for a large, concentrated asset all sit outside the calculator. Use the numbers to inform that decision, not to replace it.

Frequently asked questions

Does Moneysmart have a rent versus buy calculator for housing?

No. Moneysmart's "Rent vs buy calculator" is for goods, such as furniture. For a house or apartment, use a housing-specific comparison, including the Never Lose Interest calculator, and read Moneysmart's buying and renting guidance for the official consumer warnings.

Is rent money wasted?

Rent is the price of housing you do not own. It is a real cost. Buying has real costs too, including interest, duty, maintenance and the return you give up on the deposit. Calling rent "wasted" skips that comparison.

How big a deposit do I need?

Lenders can lend with a smaller deposit, usually with LMI. Moneysmart's buying guidance is that a 20% deposit, plus transfer costs, helps you avoid that insurance. The borrowing power guide explains how lenders assess a loan.

Should I wait for prices to fall?

This article does not forecast prices. Waiting has a cost if rents rise or if you delay a purchase you would otherwise hold for a long time. Buying sooner has a cost if prices fall early in the loan and your selling costs are still in front of you.

Does an offset account change the comparison?

It can, because money kept in a genuine offset reduces interest on the home loan, as explained in the offset guide. It does not remove stamp duty, rates or maintenance.

General information warning

This article is general information only. It is not personal advice, a property valuation or a forecast of prices, rents or investment returns, and it does not take into account your objectives, financial situation or needs. Any calculator result is only as useful as the assumptions you enter. Consider speaking with a licensed adviser if the decision is material, and confirm duty, tax and lending figures with the relevant official sources or your lender.

Sources

• Moneysmart, Buying a house, last updated 14 October 2026.
• Moneysmart, Rent vs buy calculator, which compares buying and renting household goods, not housing.
• Moneysmart, Renting and related housing guidance.
• Australian Taxation Office, main residence exemption and rental deduction materials, as cited in the main residence and negative gearing guides.
• Services Australia and the Department of Social Services, Age Pension assets test treatment of the principal home, as cited in the Age Pension and super guide.

Last reviewed: November 2026.