Why does the renter invest the difference?

Fair comparison requires equal cash outflows — whatever the buyer pays in mortgage and owner costs that the renter does not pay in rent gets invested. Discipline is the real-world catch.

Are selling costs included?

No — agent fees and selling costs (~2-3%) would widen the buying gap further at short horizons. The estimate also ignores LMI, tax differences and rent assistance.

Housing calculator

Is buying actually ahead?

The honest comparison: the renter invests the deposit, stamp duty and every dollar of monthly cash-flow difference. The buyer builds equity through amortisation and price growth. See the breakeven year.

Interactive rent vs buy comparison

Buyer equity vs the renter’s investment portfolio over your horizon — including stamp duty and the cash-flow difference the renter gets to invest.

The two scenarios

Property price (AUD)

Deposit (AUD)

State / territory

Equivalent weekly rent (AUD)

Mortgage rate (%)

Loan term (yrs)

Property growth (%/yr)

Rent growth (%/yr)

Investment return (%/yr)

What the renter earns on invested cash.

Owner costs (% of value/yr)

Rates, insurance, maintenance.

Compare over (yrs)

First-home buyer

Buying ahead by after 10 years

$134,586

Buying overtakes renting in year 3

Buyer net position

$662,613

Property value minus loan

Renter net position

$528,026

Invested deposit + saved difference

Stamp duty + upfront

$180,937

$27,937 duty + $3k costs

Wealth over time

Solid — buying · dashed — renting and investing the difference

Stylised comparison — constant growth rates, no transaction selling costs, LMI, rent assistance, or tax differences between the two portfolios. Stamp duty is an estimate; confirm with your state revenue office. General information, not advice.

Real stamp duty per state incl. first-home concessions

Renter invests the upfront cash and monthly difference

Breakeven year plus end-gap on a chart

The number everyone forgets: stamp duty

On a $750k purchase the buyer surrenders roughly $30k to the state before owning anything — the renter invests that same cash at market returns. That head start is why renting often wins inside five years even when buying wins at ten.

What this comparison cannot see

Forced saving (mortgage discipline), security of tenure, CGT exemption on the family home, and the option value of moving for work all fall outside the arithmetic. Read the breakeven as the financial answer, then weigh the rest separately.

Frequently asked questions

Why does the renter invest the difference?: Fair comparison requires equal cash outflows — whatever the buyer pays in mortgage and owner costs that the renter does not pay in rent gets invested. Discipline is the real-world catch.
Are selling costs included?: No — agent fees and selling costs (~2-3%) would widen the buying gap further at short horizons. The estimate also ignores LMI, tax differences and rent assistance.

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