Renting vs Buying Calculator

There’s no real answer to this question, because, depending on the circumstances, renting a home can better for some people while buying a home may be better for others.

Rent payments are often lower than mortgage repayments, and there are fewer property maintenance costs to worry about. To secure a rental, renters only have to pay a bond as opposed to a hefty house deposit.

But on the home-buying side, you can have greater freedom to do what you want with the property, more security of living and most importantly, you’re building equity in a property that you actually own. It’s yours, and you could potentially sell it for hefty profit years down the road.

It might be the Australian dream to own a home of your own, but depending on the circumstances, you might actually be financially better off renting over a set period of time. Our rent vs buy calculator can help you work out what the better choice is for you.

Our rent vs buy calculator will help you estimate your financial position when renting, compared to buying a house.

To use our rent vs buy calculator, you’ll need to enter following details:

• Weekly rent
• Your current savings
• Your monthly savings
• Your average annual rate of returns on your savings (if all of your savings is in cash and you don’t have any investments, like shares, you can just put your savings account interest rate)
• The property purchase price and loan amount
• The loan term
• The loan interest rate
• Any upfront and ongoing costs (for renting and buying)
• Where your savings would go if you were buying a home (savings account or offset account?)
• Assumed annual house price growth
• The period of analysis

With these inputs, the calculator can give you a rough estimation of your future net worth as a renter compared to a buyer in the period of time you’ve chosen. Although it requires a lot of assumptions, this estimation will hopefully help give you a rough idea of whether you’re better off renting or buying a home.