Compare the real 5, 10 and 20-year cost of renting versus buying. Find your personal break-even point in 60 seconds.
Built by Anish Puri, Founder & Editor of NestPath · Last updated
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Check your lease or use $550 as the national average
Buying beats renting after 1 year in your situation.
Over 15 years, buying saves you $569,778 — money that stays in your pocket, not your landlord's.
Monthly Repayment
$3,698
Your new monthly commitment
Total Rent (15yr)
$594K
Money you pay that you never get back
Net Buy Cost (15yr)
$25K
True cost after equity
This calculator provides estimates only and does not constitute financial advice. Actual costs may vary based on lender fees, stamp duty, council rates, insurance, and market conditions. Speak to a licensed professional before making any financial decisions.
The honest answer: it depends on how long you plan to stay. For most Australians in capital cities, the financial break-even point is 5 to 12 years — buying beats renting once you've lived in the same home long enough for capital growth and equity build-up to outrun the upfront costs of purchase (deposit, stamp duty, LMI, conveyancing) and the annual costs of ownership (maintenance, council rates, insurance).
Over a 15 to 20 year horizon, buying almost always wins in Sydney, Melbourne and Brisbane because residential property has historically returned 4–7% per year in capital growth, and rent in Australia rises faster than inflation — typically 3–5% per year. That means the gap between your (relatively) fixed mortgage and your renter's rising rent widens every year while your equity compounds.
Short term (under 5 years) is a different story. The transaction costs of buying and then selling a property eat roughly 5–7% of the property value — stamp duty on the way in (if you're not exempt), then agent fees and marketing on the way out. A renter who invests the same deposit + upfront-costs money in a diversified share portfolio can outperform a short-term buyer, especially in slow-growth markets.
The three variables that matter most: how long you'll stay, your capital growth assumption for the suburb, and current interest rates. Run the numbers honestly in the calculator above before making the call.
The rent vs buy comparison isn't just about monthly cash flow — it spans upfront costs, ongoing outgoings, wealth building, flexibility and tax treatment. The table below summarises the trade-offs most Australian first home buyers weigh up.
| Factor | Renting | Buying |
|---|---|---|
| Upfront cost | Bond (4 weeks rent) + 2 weeks rent in advance | Deposit (5–20%) + stamp duty + conveyancing + inspections |
| Monthly cost | Rent — rises ~3–5% per year | Mortgage — fixed if locked; variable tracks RBA rate |
| Maintenance | Landlord pays (most repairs, hot water, appliances) | You pay — typically 1–2% of property value per year |
| Wealth building | None from the property (unless actively investing surplus) | Equity grows with property value + paid-down principal |
| Flexibility | High — move at end of lease with no transaction cost | Low — selling costs 2–3% in agent fees, typically 4–6 weeks to exchange |
| Tax treatment | No tax benefits; no capital gains risk | No CGT on your principal place of residence — tax-free capital growth |
| Control | Limited — can't renovate, pets may be restricted, rent rises | Full — renovate, extend, rent it out, keep pets, paint walls |
The two most underweighted factors on this table: the CGT exemption on your family home (decades of tax-free capital growth) and rising rent over a long hold. A renter paying $650/week today is often paying $900+/week in ten years — a homeowner's mortgage repayment barely moves.
There's no universal rule, but these four patterns flip the rent vs buy math firmly toward buying:
Before you make the call: check what you can actually borrow with the borrowing power calculator and estimate monthly repayments with the mortgage repayment calculator. If the buy-side numbers stack up, talk to a vetted broker to find the loan structure that fits your situation — free, no obligation.
Remember that stamp duty is often the killer upfront cost for first home buyers — run it through the stamp duty calculator because if you're eligible for a full FHB exemption (most states cover properties under $600K–$800K), your break-even point comes years sooner than a standard buyer's. Add another $1,500–$2,500 for a conveyancer to handle the legal transfer — that's a fixed cost renters never pay, and it's part of why short holding periods favour renting.
The break-even year varies dramatically by city because of how rent yields compare to mortgage repayments. The table below shows the indicative break-even year for a typical first home buyer purchase in each capital, assuming a 20% deposit, 30-year mortgage at 6.0%, and historical capital growth rates. Use the calculator above with your specific numbers — these are starting estimates only.
| City | Indicative price | Median rent (week) | Break-even year |
|---|---|---|---|
| Sydney | $1,200,000 | $780 | Year 6–7 |
| Melbourne | $850,000 | $590 | Year 8–10 |
| Brisbane | $880,000 | $640 | Year 5–7 |
| Perth | $760,000 | $650 | Year 4–6 |
| Adelaide | $720,000 | $530 | Year 7–9 |
City medians as of early 2026; break-even ranges reflect different deposit sizes (5% via the 5% Deposit Scheme vs 20%) and inflation assumptions. Perth and Brisbane break even fastest because rent yields are highest relative to price — you are paying close to mortgage-interest-equivalent in rent already.
The compression is driven by gross rental yield. Perth and Brisbane both run at 4.0%-4.5% gross yields right now, meaning weekly rent is close to the weekly interest portion of a 6%-rate mortgage. Sydney's gross yield is ~3.4% and Melbourne's is ~3.6% — much further apart from mortgage costs, which widens the buy-side capital outlay needed to reach break-even. Capital growth narrows this gap over time, but in years 1-5 the cash-flow gap is what matters.
The third path between rent vs buy is rentvesting — renting in your preferred lifestyle location (inner Sydney, inner Melbourne, beachside) while buying an investment property in a higher-yield, lower-priced market (outer Brisbane, regional QLD, Adelaide, Perth growth corridors). Rentvesting trades the certainty of living in your own home for stronger cash flow and earlier wealth accumulation.
Two real downsides. First, you lose access to the FHB grant stack on the investment property — most state First Home Owner Grants and stamp duty exemptions require you to live in the property for 6-12 months. On a $620K Brisbane investment, this can be $32,000+ of forfeited stamp-duty concession alone. Second, you trade CGT-free growth on your own home for CGT-taxed growth on the investment (with the 50% discount). Over 20 years on a strong-growth property, the CGT bill can run $80K-$200K+ that an owner-occupier never pays.
The 12 May 2026 federal budget added a third consideration: negative gearing has been restricted for new investor purchases of established residential property from 12 May 2026 (carve-out preserved for new builds). Rentvesters buying established stock can no longer offset rental losses against their salary income — losses are ring-fenced to rental income / capital gains on rental property. Full negative-gearing post-budget guide.
For a deeper analysis of when rentvesting beats buying your own home, see our negative gearing and rentvesting guide.
A NestPath vetted broker will model the real numbers — your income, your deposit, current rates — and give an honest view on whether buying stacks up right now. No fee, no sales pitch.
It depends almost entirely on your time horizon. If you plan to stay in the same home for 5 years or less, renting and investing your deposit often comes out ahead. If you plan to stay 7+ years, buying almost always wins in Australian capital cities because rent rises faster than mortgage repayments and you build equity with every payment. The break-even point most commonly lands between 5 and 12 years.
For most Australian first home buyers in capital cities, buying overtakes renting financially between year 5 and year 12. The exact year depends on your deposit size, property growth rate in your suburb (historically 4–7% per year in Sydney, Melbourne, Brisbane), and the gap between your rent and your mortgage repayment.
Yes — but only if you actively invest the money you would otherwise put into a deposit and home maintenance. "Rentvesting" strategies typically invest the saved amount into diversified shares or ETFs returning 8–10% per year on average. The catch: most renters do not invest the difference. If you have the discipline to automate investments, renting + investing can match or beat buying over shorter horizons.
If you plan to stay 5+ years in the same city and can afford the deposit + stamp duty + upfront costs without wiping out your emergency fund, buying is usually the right call. Most Australian states offer full stamp duty exemptions for FHBs under certain thresholds, and the First Home Guarantee lets you buy with just 5% deposit and no LMI. If you may move cities within 3 years, keep renting — transaction costs will eat short-term gains.
This calculator provides estimates only and should not be relied upon for financial decisions. Property capital growth and rent inflation are historical averages and cannot be guaranteed. NestPath is not a financial adviser — seek independent advice before making financial decisions.
Everything you need to buy your first home