Rent vs Buy Calculator
The year buying pulls ahead of renting for a property price, deposit, rate and rent — with transfer duty for your state, lenders mortgage insurance, and the growth of what a renter keeps invested.
Buying starts behind: the deposit, transfer duty, any LMI and legals are sunk on day one.
How the rent vs buy calculator works
Buying starts behind: the deposit, transfer duty, any LMI and legals are sunk on day one. Each year the owner pays interest, principal and running costs while the property grows; the renter pays rent, keeps the upfront money invested and banks any month where owning would have cost more. The net position of each is compared year by year, and the break-even is the first year buying is ahead after selling costs.
Formula: Upfront = deposit + duty + LMI + legals · owner net = equity − 2.5% selling costs − all outlays · renter net = invested upfront (growing at the return, plus any monthly difference) − rent paid − upfront
How the break-even year is worked out
Two positions, compared year by year
The calculator runs both paths in parallel for as many years as you choose. On the buying side it amortises the loan month by month, grows the property at your assumed rate, and adds the costs renters never see — council rates, building insurance, strata and maintenance at 1% of value a year. Your net position is equity, minus about 2.5% selling costs, minus every dollar you have paid out.
On the renting side it does the thing most comparisons skip: it invests the entire upfront amount the buyer sank into the purchase — deposit, transfer duty, LMI and legals — plus any month where owning costs more than renting. Rent rises at your assumed rate each year. The renter’s net position is that portfolio minus the rent paid.
The break-even year is the first year the buyer’s net position overtakes the renter’s. Before it, renting is ahead; after it, buying is.
Worked example
An $850,000 purchase in NSW with a 20% deposit: $170,000 deposit, $32,437 transfer duty, no LMI, $2,200 legals — $204,637 upfront. The $680,000 loan at 6.20% over 30 years is $4,165 a month. Against $650-a-week rent growing 3.5% a year, with property growth at 4% and the renter earning 7% on the invested deposit, buying pulls ahead around year eight. Move the state to Victoria and duty jumps to $46,070, pushing break-even out by roughly a year on its own.
🧾 The upfront wallTransfer duty, LMI and why buying starts behind
Buying does not start level. Before any equity exists you have paid:
- Transfer duty — a state tax, and the largest single line. On $850,000: $32,437 in NSW, $46,070 in VIC, $31,275 in QLD. That $14,600 spread between VIC and QLD on an identical purchase is enough to shift the break-even year by itself. First home buyers pay nothing in several states below the concession thresholds.
- LMI — charged once when your LVR exceeds 80%, and it protects the lender, not you. Roughly 1.0% of the loan at 85% LVR, 2.1% at 90%, 3.6% at 95%. On a $765,000 loan at 90% that is $16,218, normally capitalised so you pay interest on it for decades.
- Legals and searches — conveyancing, searches and settlement, around $2,200.
Then there is the exit: agent commission, marketing and conveyancing take about 2.5% of the sale — roughly $31,000 on a $1.25 million sale. Duty on the way in and commission on the way out are a two-sided drag you must grow through before ownership pays, which is the real reason a short hold rarely wins.
⚖️ What actually decides itThe four inputs that move the answer most
1. How long you stay
The single biggest factor. Under about five years, renting wins in most scenarios because you never grow through the transaction costs. Past ten years, buying wins in most. Everything else adjusts the crossover by a year or two; this moves it by many.
2. Property growth versus your investment return
These two assumptions fight each other. If property grows 4% and your portfolio returns 7%, the renter’s money compounds faster per dollar — but the buyer has leverage, because growth applies to the whole $850,000, not just the $170,000 deposit. That leverage is why buying still wins over long horizons at lower growth rates.
3. Which state you buy in
Transfer duty is the only major cost that changes purely by geography. The same purchase costs $14,600 more in Victoria than Queensland before anything else differs.
4. The ongoing costs
Rates, insurance, strata and maintenance run roughly $12,000 a year on an $850,000 house and about $6,000 more again on a strata apartment. None of it builds equity. It is why the true monthly gap is wider than comparing rent against the repayment.
What this calculator does not model: the capital gains tax main-residence exemption (a real advantage to owning that is not priced here), negative gearing on investment property, or the security and freedom of tenure that make this decision more than arithmetic.
❓ Frequently asked
Where these figures come from
- Transfer duty scales — each state revenue office’s current published rates, the same scales used by this site’s per-state duty calculators: Revenue NSW, State Revenue Office Victoria, Queensland Revenue Office.
- LMI premiums — indicative mid-market rates by LVR band; your lender’s actual premium will differ. Compare with the LMI calculator.
- Loan amortisation — standard monthly annuity: repayment = P × r ÷ (1 − (1+r)−n), with r the monthly rate and n the number of months.
- Maintenance — the widely used 1%-of-value-a-year rule of thumb; older properties commonly run higher.
- Selling costs — agent commission, marketing and conveyancing, typically about 2.5% of the sale price and varying by agent and state.
Last checked: August 2026. This is a planning estimate, not financial advice. Growth and investment-return assumptions are yours, and small changes to either move the break-even year materially — treat the output as a range, not a date. It does not model the CGT main-residence exemption, which is a genuine advantage to owning.
Understanding your resultSelect the question that matches where you are right now.
The headline number is the the rent-vs-buy comparison percentage for this drink — the wholesale cost of one pour as a share of what you charge for it. The breakdown shows pours per bottle, the cost per pour, the gross profit per drink and the price you'd need to hit your target the rent-vs-buy comparison.
What to do with itCompare the the rent-vs-buy comparison to the benchmark for that drink type. If it's above the band, either lift the price to the suggested figure or tighten the pour — a smaller measure or a controlled pourer brings the percentage straight back down.
What it is notIt's not your profit. the rent-vs-buy comparison only counts the wholesale liquor — wages, rent, GST, wastage and card fees all come out of the gross margin on top. A 15% the rent-vs-buy comparison does not mean an 85% profit.
Cost the pour, not the bottleTwo bottles at the same price can have very different the rent-vs-buy comparisons if the measures differ. Enter the real pour and bottle sizes so the percentage reflects what actually goes in the glass.
Four things move the rent-vs-buy comparison the most: the wholesale bottle cost, the pour size, the bottle size and the price you charge.
Pour & bottle sizeThese set how many pours you get. A 30 ml pours from a 700 ml bottle is ≈23 pours; drop to 15 ml and you double it, halving the cost per pour and the the rent-vs-buy comparison.
Cost vs pricethe rent-vs-buy comparison is cost per pour ÷ price, so raising the price or buying the bottle cheaper both pull the percentage down. It's the ratio that matters, not either figure alone.
Drink type & wastageSpirits, beer and wine sit in different benchmark bands, and real yield always falls short of the theoretical pours because of spillage, foam and over-pouring — so the actual the rent-vs-buy comparison runs a little above the calculated one.
A few habits keep the the rent-vs-buy comparison you calculate close to the one you actually run.
Measure every pourUse a jigger or controlled pourer — free-pouring a 30 ml pours often lands at 35–45 ml, a 20–50% over-pour straight onto your cost. This is the single biggest lever.
Stocktake regularlyCompare theoretical usage to actual. A gap between the two is wastage, un-rung sales or over-pouring — find it before it becomes a habit.
Price to a targetSet the target the rent-vs-buy comparison per category and use the suggested price as your floor. Revisit it whenever a supplier price rises so margins don't quietly erode.
the rent-vs-buy comparison is one line in the venue's numbers. Model the wider margin, GST and running costs of the business.
Margin on the menuTurn cost and price into a gross margin across the whole list.
Profit margin calculator → GST on the tillAdd or back out the 10% GST on your prices.
GST calculator → Covering fixed costsSee how many drinks cover rent, wages and overheads.
Break-even calculator → Related calculators 🏠Mortgage RepaymentMonthly repayments and total interest📊Borrowing CapacityHow much a lender will lend you🧾NSW Stamp DutyTransfer duty by purchase price🛡️LMIPremium when your deposit is under 20%📈Rental YieldGross and net yield on an investment🔑First Home BuyerGrants, concessions and deposit 🏦Business LoanFit-out finance 💼Business ValuationWhat the venue is worth You might also be interested in 📈Profit MarginGross margin 🧾GST Calculator10% GST ⚖️Break-EvenCover fixed costs 🚀Business StartupCost to open 📊Budget SurplusTrading budget 💼Business ValuationValue the venue Rate this calculatorQuick answers
How long until buying beats renting? Typically 7–10 years
Buying starts behind because of transfer duty, LMI and legals — on an $850,000 Sydney purchase with a 20% deposit that is $204,637 before you own anything. The break-even is the year your equity, minus selling costs, finally overtakes what a renter would have built by investing the same money. In most Australian capitals at current rates that lands somewhere between year 7 and year 10; faster if property growth outpaces your investment return, slower if it does not.
| Upfront on $850k | $204,637 |
|---|---|
| Typical break-even | 7–10 yrs |
| Driven by | Duty + growth |
- Moving in <5 yrs Renting usually wins
- Staying 10+ yrs Buying usually wins
Transfer duty is the biggest upfront cost $0 – $50k+ by state
Transfer (stamp) duty is charged by the state, not the Commonwealth, and the scales differ sharply. On an $850,000 purchase it is $32,437 in NSW, $46,070 in VIC and $31,275 in QLD — a $14,600 spread between VIC and QLD on the same purchase, enough to move the break-even year by itself. First home buyers pay nothing in several states below the concession thresholds. This calculator uses each state's current published scale.
| NSW on $850k | $32,437 |
|---|---|
| VIC on $850k | $46,070 |
| QLD on $850k | $31,275 |
- First home buyer Often $0
- Sets The break-even
LMI when your deposit is under 20% ~1–4.5% of the loan
Lenders Mortgage Insurance protects the lender, not you, and is charged once when your loan-to-value ratio exceeds 80%. The premium climbs steeply: roughly 1% 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, usually capitalised onto the loan so you pay interest on it for decades. Getting to a 20% deposit avoids it entirely.
| At 85% LVR | ~1.0% |
|---|---|
| At 90% LVR | ~2.1% |
| At 95% LVR | ~3.6% |
- 20% deposit No LMI
- Usually Added to the loan
What the renter does with the money Deposit invested instead
A fair comparison does not just weigh rent against repayments. The renter still has the deposit, the duty and the legals — invested rather than sunk into a house. At a 7% return, $204,637 invested becomes about $402,600 in ten years. That opportunity cost is why renting can stay ahead for years even when rent rises. The buyer's counterweight is leverage: growth applies to the whole property value, not just the deposit.
| $204,637 at 7% | $402,600 in 10 yrs |
|---|---|
| Buyer's edge | Leverage |
| Renter's edge | Liquidity |
- Higher returns Favour renting
- Higher growth Favour buying
The ongoing costs renters do not pay ~$6–10k a year
Ownership adds council rates (about $2,200 a year), building insurance (about $1,600), and maintenance — the rule of thumb is 1% of the property value a year, so $8,500 on an $850,000 house. Strata adds $3,000–$6,000 on an apartment. None of that builds equity. Renters pay contents insurance and nothing else, which is why the monthly gap between renting and owning is usually wider than the headline repayment suggests.
| Council rates | ~$2,200/yr |
|---|---|
| Maintenance | ~1% of value |
| Strata (unit) | $3–6k/yr |
- On $850k ~$12k/yr
- Builds equity No
Selling costs claw back the gain ~2.5% of the sale
Agent commission, marketing, conveyancing and settlement usually take about 2.5% of the sale price — around $31,000 on a $1.25m sale after ten years of growth. That comes straight off the equity you built, which is why a short hold rarely pays: you can be fully in the black on paper and still behind a renter once the sale costs land. It is the second reason, after duty, that break-even sits years out.
| Agent + costs | ~2.5% |
|---|---|
| On a $1.25m sale | ~$31,000 |
| Comes off | Your equity |
- Short hold Rarely pays
- With duty The two-sided drag
Worked examples
| Inputs | Buying pulls ahead in year | Note |
|---|---|---|
| $850,000 in NSW, 20% down, 6.2%, renting at $650 a week | 1 | $204,637 upfront ($32,437 duty); buying ahead from year 1 |
| The same place with a 10% deposit — LMI applies | 1 | LMI at 90% LVR is about 2.12% of the loan |
| A first home buyer in Victoria under $800,000 | 1 | no transfer duty |
FAQFrequently asked questions
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.
The sources behind this calculator
- Revenue NSW — Transfer duty — the NSW transfer duty scale the rent-vs-buy page applies, alongside each other state's published scale
- Moneysmart — Buying a house — the upfront costs of buying: deposit, duty, lenders mortgage insurance and conveyancing
- Moneysmart (ASIC) — the regulator's guidance on buying, borrowing and lenders mortgage insurance
Last checked: September 2026. Duty scales are the state revenue offices' own; they change at each state budget and are verified against the office when they do.