🏠Rent vs Buy Calculator

Stamp Duty and Entry Costs in Australia

Stamp duty is one of the largest hurdles for Australian homebuyers, often costing tens of thousands of dollars depending on the state. While first-home buyer grants may offer exemptions, the 'sunk cost' of buying is high. Our calculator factors in these state-specific taxes, showing you the 'tenure' required before buying becomes cheaper than renting in the current Australian market.

Australian Government – Stamp Duty Guide

The 'Rentvesting' Strategy in Australia

Many Australians now 'rentvest'—renting where they want to live while buying an investment property where they can afford. ASIC Moneysmart notes that this can provide tax advantages through negative gearing. Our tool allows you to compare the cost of renting a premium property against the long-term equity growth of a suburban home, helping you see if this popular Aussie strategy works for you.

ASIC Moneysmart – Property Investment

Ongoing Costs: Rates, Water, and Strata

Homeownership in Australia comes with recurring costs that renters don't pay, such as council rates, water rates, and strata fees for apartments. The ABS reports that these 'housing costs' are rising faster than general inflation. Use this tool to include these Australian-specific expenses in your comparison, ensuring you aren't underestimating the true monthly cost of owning a home in Australia.

Australian Bureau of Statistics (ABS)

Is it better to rent or buy in Sydney or Melbourne?

In high-priced cities like Sydney, the 'yield' on property is often low (2-3%), meaning rent is relatively cheap compared to mortgage interest. However, Australians often rely on high capital growth to make buying worthwhile. Our calculator lets you input your expected annual growth rate to see if the 'capital gain' in Australia's major cities outweighs the high cost of a mortgage.

How do Australian interest rates affect the decision?

Australian home loans are highly sensitive to the RBA's cash rate. A 1% increase in rates can shift the rent-vs-buy balance significantly. This tool helps you stress-test your decision: if rates rise by another 2%, would renting have been the safer financial choice? This is a critical question for many Australian households today.

What are the tax benefits of buying in Australia?

For your 'Main Residence,' the primary benefit is the 100% exemption from Capital Gains Tax (CGT) when you sell. This makes the family home a powerful tax-free wealth builder in Australia. Our calculator factors in this tax-free growth compared to the taxable gains you might get from investing your down payment in the stock market (ASX).

What This Calculator Accounts For:

• Purchase costs (down payment, closing costs, fees)
• Monthly costs (mortgage, HOA, taxes, maintenance)
• Opportunity cost (down payment invested vs tied up)
• Home appreciation and rent inflation
• Selling costs (commission, taxes)

Why does the calculator say renting is better when everyone says to buy?

Conventional wisdom ignores opportunity cost - the money you could make by investing your down payment and monthly difference. In many markets, especially in major cities, the math favors renting. The outcome depends heavily on local prices, interest rates, and how long you plan to stay.

But rent doesn't build equity!

Correct, but the money you save renting CAN build equity - through investments. If you invest $100,000 down payment + $1,500/month difference at 8% annually for 20 years, you'll have over $1 million. Buying a home isn't the only way to build wealth.

What if home prices rise a lot?

The calculator lets you adjust the appreciation rate. But remember: historically, real estate appreciates about 3-5% annually (similar to inflation), while the stock market returns 7-10%. Also, when home prices rise, rents rise too - maintaining the ratio. Periods of exceptional appreciation are hard to predict and shouldn't be the basis for your decision.