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Buy vs Rent — The Honest Calculator

Every bank calculator says buy. This one includes what they leave out: stamp duty, strata, maintenance, insurance, agent fees on sale, vacancy risk if you rent it out, and the full opportunity cost of your deposit invested in an index fund instead. Then it shows you the real 10, 20 and 30-year wealth comparison.

Compare over
🏠 If you buy
📦 If you rent + invest
💡 The renter invests: (1) the full deposit + stamp duty upfront, (2) the monthly difference between mortgage repayment and rent, and (3) any extra savings amount above.
💸 Hidden costs of ownership
Banks never include these. They're real, they're annual, and they compound.
Strata / body corporate (if applicable) Apartments only. Varies $1,200–$8,000+/yr.
Council rates & land tax ~0.3–0.5% of property value annually.
Building & contents insurance $1,500–$4,000/yr depending on property type.
Maintenance & repairs Rule of thumb: 1–2% of property value per year. Often under-budgeted.
Agent fees on eventual sale 2–3% of sale price. On a $1.3M future sale = $26–39k. Amortised here over the holding period.
%
🏠
Buy
—
Net equity after all costs
📈
Rent + Invest
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Portfolio value at year 20
At 20 years
—
Net wealth comparison over time
True cost of buying — upfront + 20yr running
Sensitivity — who wins at different capital growth rates?
The single biggest swing variable. Market returns assumed constant at 9%.
Sources & methodology: Transaction cost framework based on RBA Research Discussion Paper 2018-01 — "Housing Affordability in Australia". Maintenance cost benchmark (1–2% of property value) from Harvard Joint Center for Housing Studies. Index fund returns: long-run global equity market data from S&P SPIVA and Credit Suisse Global Investment Returns Yearbook. Stamp duty estimate uses a simplified tiered approximation — actual duty varies by state/country, first home buyer status, and concessions. Use your actual figure for precision. Important: This model does not account for capital gains tax on investment portfolio disposal, negative gearing tax benefits, or PPOR CGT exemption in Australia. These are significant variables — consult a tax adviser for your specific situation.
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📖 Why this calculator is different Tap to expand

Every bank calculator says buying is better. This is because banks don't include the costs that make buying expensive, and they don't model what happens when you invest the deposit and the difference in monthly costs instead.

What this calculator includes that others don't:

  • Stamp duty — gone on day one, never recovered
  • Strata / rates / insurance / maintenance — real annual costs that compound over time
  • Agent fees on eventual sale — calculated on the future property value, not today's
  • Opportunity cost of the deposit — what your deposit and stamp duty would compound to if invested instead

The renter scenario invests three things: the full deposit + stamp duty upfront, the monthly difference between the mortgage payment and rent, and any extra savings. This is a fair comparison — both parties have the same money available.

The result depends heavily on capital growth assumptions. Australian long-run real capital growth (after inflation) is approximately 2.5–3% per year. The sensitivity table shows who wins at each growth rate.

Glossary: Opportunity cost · Stamp duty · Net worth

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