How long does it take for buying to be better than renting in Australia?

For a typical Australian capital city property at current prices, mortgage rates, and rents, buying tends to pull ahead of renting in net worth terms somewhere between year 7 and year 15. The break-even point is shorter when property growth is high, your deposit is large, and rents are rising quickly.

What investment return should I assume for the renter in a rent vs buy comparison?

The Australian share market (ASX 200) has historically returned around 7–10% per year including dividends, before tax. A common conservative assumption is 7% per year, which represents a diversified portfolio of Australian and international shares. If you assume the renter invests their deposit and annual savings at this rate, you can compare it against property growth (historically 5–7% per year in major cities). The calculator lets you adjust both rates to test different scenarios.

§ 08 — Property

Should you rent or buy?

Q: What upfront costs do I need to budget for when buying a home in Australia?

The main upfront costs are: deposit (typically 10–20% of the property price), stamp duty (varies by state — from around $15,000 to $50,000+ on a $750,000 home), conveyancing fees ($1,000–$2,500), building and pest inspection ($500–$700), and lender's mortgage insurance (LMI) if your deposit is under 20%. Total upfront costs beyond the deposit commonly run $20,000–$60,000 depending on the state and property price.

Buying builds equity and captures capital growth, but ties up a large deposit and costs more to run each month. This calculator compares the net wealth outcome of both paths — accounting for stamp duty, mortgage repayments, maintenance, rent inflation, and the return a renter earns on their invested deposit.

Updated · Apr 2026·Source: ATO · State revenue offices

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Property & mortgage

State / territory

Property price

Deposit

Mortgage rate

Loan term

First home buyer

Renting

Monthly rent

Annual rent increase

%/yr

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Property growth

%/yr

Investment return

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Applied to renter's invested deposit

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The result

Enter your details and click Compare to see net worth projections, the break-even year, and whether buying or renting comes out ahead over your chosen timeframe.

Frequently Asked Questions

Is it better to rent or buy a house in Australia in 2025?+ open

It depends on your state, property price, deposit size, and how long you plan to stay. Buying typically builds more wealth over the long term through equity and capital gains, but renting can be ahead in the short term because stamp duty, higher repayments, and maintenance take years to recoup. Use the calculator to find your break-even year.

How long does it take for buying to beat renting in Australia?+ open

For a typical Australian capital city property at current prices and mortgage rates, buying tends to pull ahead in net worth terms between year 7 and year 15. The break-even is shorter when property growth is high, your deposit is large, and rents are rising quickly.

What upfront costs do I need to budget for when buying a home in Australia?+ open

The main upfront costs are: deposit (typically 10–20%), stamp duty (varies by state — roughly $15,000–$55,000 on a $750,000 home), conveyancing ($1,000–$2,500), and building inspection ($500–$700). Total upfront costs beyond the deposit commonly run $20,000–$60,000. First home buyers may qualify for stamp duty exemptions in some states.

Does a larger deposit make buying better than renting?+ open

Yes — a larger deposit reduces your loan amount and monthly repayments, lowering the cost advantage of renting and bringing the break-even year forward. A 20% deposit also avoids Lender's Mortgage Insurance (LMI), which can add $10,000–$30,000 to your purchase cost.

What investment return should I assume for the renter?+ open

The ASX 200 has historically returned around 7–10% per year including dividends. A conservative assumption of 7% per year (diversified shares) is commonly used. The calculator lets you adjust both the investment return and the property growth rate to test different scenarios.