Purchase price
$200k$3m
Identical cash, two different assets
Rent vs Buy Calculator - where does the money end up
The buyer sinks deposit, duty and fees into a home. The renter invests the same cash and the yearly difference. Same money leaves the household either way - this tracks where it ends up.
Buying ends ahead over 15 years - under your assumptions
Buy advantage
$354,789
Crossover
Year 2
when home equity catches the portfolio
At year 15
Buy: home equity ($1.67m value less loan)$1,246,228
Rent: invested portfolio$891,439
The main residence is CGT-exempt; the portfolio compounds pre-tax and would face tax in practice - an asymmetry that favours buying (see the FAQ).
Arithmetic against your assumptions - not a recommendation.
The buyer's upfront cash - what the renter invests on day one
Deposit
$150,000
20% of price
Transfer duty
$19,600
owner-occupier scale
LMI
-
not payable
Fees
$3,400
legals, inspection, setup
Total
$173,000
then $3,636/mo
Year by year
| Yr | Home value | Loan | Buy net worth | Ownership | Rent paid | Invested | Portfolio |
|---|---|---|---|---|---|---|---|
| 1 | $791k | $593k | $198k | $52,632 | $32,240 | $20,392 | $206k |
| 2 | $835k | $585k | $250k | $53,127 | $33,368 | $19,758 | $240k |
| 3 | $881k | $577k | $304k | $53,649 | $34,536 | $19,113 | $276k |
| 4 | $929k | $568k | $361k | $54,200 | $35,745 | $18,455 | $313k |
| 5 | $980k | $559k | $421k | $54,781 | $36,996 | $17,785 | $353k |
| 6 | $1.03m | $549k | $485k | $55,394 | $38,291 | $17,103 | $395k |
| 7 | $1.09m | $539k | $552k | $56,041 | $39,631 | $16,410 | $439k |
| 8 | $1.15m | $528k | $623k | $56,724 | $41,018 | $15,705 | $485k |
| 9 | $1.21m | $516k | $698k | $57,444 | $42,454 | $14,990 | $534k |
| 10 | $1.28m | $503k | $778k | $58,203 | $43,940 | $14,264 | $586k |
| 11 | $1.35m | $490k | $861k | $59,005 | $45,478 | $13,527 | $640k |
| 12 | $1.43m | $476k | $950k | $59,850 | $47,069 | $12,781 | $698k |
| 13 | $1.50m | $461k | $1.04m | $60,742 | $48,717 | $12,026 | $759k |
| 14 | $1.59m | $445k | $1.14m | $61,684 | $50,422 | $11,262 | $823k |
| 15 | $1.67m | $428k | $1.25m | $62,676 | $52,187 | $10,490 | $891k |
"Invested" is ownership outgoings less rent - the renter banks it while positive and draws it from the portfolio once rent overtakes ownership costs.
Buying your first home? Grants and duty concessions change this maths materially.
The honest version of rent vs buy is a discipline question
Buying wins most published comparisons for a quiet reason: the mortgage is forced saving, while the renter's "invest the difference" requires actually investing the difference, every month, for decades. This model gives the renter full credit for perfect discipline - the strongest honest case for renting. If buying still ends ahead under those terms, the margin is real; if renting ends ahead only because of a generous return assumption, the sensitivity is telling you where the risk sits.
The structural forces are worth naming. Ownership sinks heavy costs upfront - duty, fees, mostly-interest early repayments - and then compounds growth on the entire property value, tax-free for a main residence, while rent compounds against the tenant forever. Renting keeps the upfront cash working immediately and wins whenever the stay is short: the crossover year is the single most decision-relevant number on this page. Under roughly seven years, the answer is usually the portfolio; past it, the home.
Price the purchase side precisely with the stamp duty calculator and the borrowing power calculator; eligible first home buyers should run their state's first home buyer calculator, because concessions remove much of the upfront drag this comparison charges the buyer. Renting while investing in property instead? That is rentvesting - the investment property calculator prices the investment side under the post-2026 rules.
Frequently asked questions
How does this rent vs buy comparison actually work?
It makes the two paths spend identical cash. The buyer sinks the deposit, duty, LMI and fees into a home and pays the mortgage plus rates, insurance and maintenance every year. The renter invests exactly that upfront cash, pays rent, and invests the yearly difference between ownership outgoings and rent - and when rent eventually overtakes ownership costs, the model draws the shortfall from the portfolio. Net worth is then home equity on one side and the portfolio on the other.
What return should I assume on the invested difference?
Something you would genuinely hold for the full horizon. Long-run diversified share returns are commonly quoted around 7 to 9% before tax; cash earns less; leverage or concentrated bets are not comparable. The model compounds the portfolio pre-tax, so if your alternative would be taxed annually, shade the return down. The comparison is more sensitive to this number than any other input - test a range.
Why is the home CGT-free but the portfolio is not?
A main residence is generally exempt from capital gains tax, which is one of ownership's structural advantages. The portfolio's returns are modelled pre-tax and would face tax in practice - on distributions along the way and CGT when sold. That asymmetry favours buying and is disclosed rather than modelled, because the portfolio's tax depends on structure, rate and timing choices the calculator cannot know.
What does the crossover year mean?
The first year the buyer's equity meets the renter's portfolio. Buying usually starts behind - duty and fees are sunk immediately, and early mortgage payments are mostly interest - then compounding growth on the whole property value does the catching up. If the crossover lands beyond how long you would realistically stay, renting wins your actual case even if buying wins the 30-year chart. Moving costs roughly reset the clock.
Does the calculator include first home buyer concessions?
Not in this comparison - duty uses the general owner-occupier scale for the state selected. Concessions, grants and deposit schemes can remove most of the upfront duty for eligible buyers and materially shift the answer toward buying: run your state's first home buyer calculator for the exact concession, then lower the duty mentally here. A concession-aware version of this comparison is on the roadmap.
Duty uses the general owner-occupier scale - first home buyer concessions are not applied here. Portfolio returns compound pre-tax; selling costs at the horizon, moving costs, and rent for the buyer during settlement are not modelled. Ownership costs grow with the property's value. General information only.