Rent vs Buy Calculator Australia 2026-27 — Break-Even Year | GlobalCalc

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

Usually seven to ten years. Buying starts a long way behind because of transfer duty, LMI and legal costs — on an $850,000 purchase with a 20% deposit that is $204,637 before you own anything. The break-even is the year your equity, after selling costs, finally overtakes what a renter would have built by investing the same money. It arrives sooner if property growth beats your investment return, and later if it does not.

How much is stamp duty when buying a home?

It depends entirely on the state, because transfer duty is a state tax. On an $850,000 purchase it is $32,437 in NSW, $46,070 in Victoria and $31,275 in Queensland — a $14,600 spread on an identical purchase, which is enough to move the break-even year on its own. First home buyers pay nothing in several states below the concession thresholds. This calculator uses each state revenue office’s current published scale.

Do I have to pay LMI if my deposit is under 20%?

Yes, in almost all cases. Lenders Mortgage Insurance protects the lender rather than you, and it is charged once when your loan-to-value ratio goes above 80%. The premium climbs steeply — roughly 1.0% of the loan at 85% LVR, 2.1% at 90% and 3.6% at 95%. On a $765,000 loan at 90% LVR that is $16,218, and it is usually capitalised onto the loan so you pay interest on it for the life of the mortgage.

Is renting really throwing money away?

No. That framing ignores what the renter does with the deposit. A fair comparison invests the money the buyer sank into the purchase: at a 7% return, $204,637 becomes about $402,600 in ten years. The buyer’s counterweight is leverage — capital growth applies to the whole property value, not just the deposit — which is why buying usually wins over long horizons and loses over short ones.

What ongoing costs do owners pay that renters do not?

Council rates of roughly $2,200 a year, building insurance of about $1,600, and maintenance — the standard rule of thumb is 1% of the property value annually, so $8,500 on an $850,000 house. An apartment adds strata of $3,000 to $6,000. None of that builds equity. Renters pay contents insurance and nothing else, so the real monthly gap is wider than comparing rent to the repayment suggests.

Should I buy if I might move in a few years?

Usually not. Transfer duty on the way in and agent commission of about 2.5% on the way out are a two-sided drag you have to grow through before ownership pays. On a $1.25 million sale after ten years of growth, selling costs alone take about $31,000 off your equity. If there is a real chance you will move within about five years, renting and investing the deposit is normally the stronger position.

Rent vs Buy Calculator

How the break-even year is worked out

Two positions, compared year by year

Worked example

Transfer duty, LMI and why buying starts behind

The four inputs that move the answer most

1. How long you stay

2. Property growth versus your investment return

3. Which state you buy in

4. The ongoing costs

Frequently asked questions

Where these figures come from