Is it better to rent or buy in Australia in 2025-26?

It depends on your time horizon, the city, and the gap between rent and mortgage repayments. As a rough rule, buying typically beats renting financially after 5-7 years if you stay put, but high stamp duty, slow capital growth or short stays can flip the answer.

How does the calculator handle stamp duty and selling costs?

Buying costs include stamp duty (state-specific), conveyancing and inspections. Selling costs include agent commission (typically 2-2.5%) and marketing. Both are factored into the break-even calculation.

What's the break-even point and how is it calculated?

Break-even is the year where the cumulative cost of buying (deposit, stamp duty, repayments minus principal paid down, maintenance, rates) equals the cumulative cost of renting (rent paid plus opportunity cost of the deposit invested elsewhere).

Does the calculator account for property price growth?

Yes, you input an expected annual capital growth rate. Australian capital city averages over the last 20 years are roughly 5-6% per year, but vary widely by city and timeframe — be conservative with your assumption.

What investment return should I assume on the deposit if I rent?

A balanced portfolio (60% shares, 40% bonds) has historically returned 6-7% per year in Australia before tax. The default in the calculator is 6%, but you can adjust it to match your own investment plan.

Rent vs Buy Calculator Australia

Should you keep renting or buy a place? This calculator projects the long-term financial outcome of each path in Australia, including property growth, rental inflation, mortgage interest, ownership costs, and the opportunity cost of investing your deposit instead. Use it as a starting point to think clearly about a decision that goes far beyond the numbers.

Buying details

Property price

Deposit Including any first home buyer help.

Mortgage rate (% p.a.)

Loan term (years)

Renting details

Weekly rent

Annual rent increase (%)

Comparison

Annual property growth (%) Long-run Australian capital city growth has averaged ~4–5% nominally.

Years to compare

Net cost over the comparison period

Net cost of buying

—

all costs less ending equity

Net cost of renting

—

rent paid less investment gain on deposit

Difference

—

positive = buying is cheaper

Break-even point

—

when buying becomes cheaper

Buying breakdown

Renting breakdown

How to use this calculator

Enter the property price you’re considering, your deposit and the loan terms a lender has indicated.
Enter what an equivalent property would cost to rent each week and a realistic annual rent increase.
Choose a property growth assumption — long-run Australian capital city growth has averaged around 4–5% nominally, but your suburb may vary.
Choose how many years to compare. Most break-even analysis uses 7–10 years.
The result shows the net cost of each path and tells you when buying becomes cheaper if you keep the property long enough.

Key assumptions

Buyer pays the deposit upfront, then makes principal-and-interest mortgage repayments at a fixed rate.
Stamp duty and other purchase costs are not included — use our stamp duty calculator to estimate those separately.
Annual ownership costs (council rates, strata, insurance, maintenance) are estimated at 1.5% of the property’s value each year.
Selling costs (agent commission and legal fees) are estimated at 2.5% of sale price at the end of the period.
The renter invests the equivalent of the deposit in a diversified portfolio earning 6% nominal per year.
Rent grows by the annual rate you specify; the comparison is in nominal dollars.
No tax effects (negative gearing, capital gains, principal place of residence exemption) are modelled. Owner-occupier buyers normally benefit from full CGT exemption on their main residence — this materially favours buying for long holds.

Frequently asked questions

Is it better to rent or buy in Australia?

Financially, buying tends to win for long holds (10+ years) at typical Australian growth rates because the buyer ends up with an asset that has appreciated tax-free as a main residence. Renting tends to win for short holds because purchase costs (stamp duty, legal, mortgage establishment) are large and only amortised over the time you own. The break-even point depends heavily on the price-to-rent ratio in your area.

What property growth rate should I use?

Long-run nominal growth in Australian capital cities has averaged around 4–5% per year, though shorter periods can vary widely. Use a conservative figure (3–4%) to stress-test your decision. The lower the growth assumption, the longer the break-even.

Why does the calculator favour renting in some scenarios?

This model includes the opportunity cost of your deposit — the fact that if you rent, you could invest the deposit elsewhere (e.g. in shares) and earn a return. When property growth is low, mortgage rates are high, and the rent-to-price ratio is favourable, renting and investing the deposit can outperform buying — at least until the property has had enough years to compound and the loan is largely paid down.

Does this account for stamp duty and First Home Buyer concessions?

No — to keep the model transparent, stamp duty and concessions are excluded. Use our stamp duty calculator to estimate state-specific upfront costs and add (or remove) them from the buying side of the equation.

This calculator provides general estimates only and is not financial advice. Please consult a licensed financial adviser before making any financial decisions.