Rent versus buy guide
Compare rent with an equivalent mortgage repayment
This calculator shows the approximate loan whose repayment may be similar to your current weekly rent at a selected interest rate and term. It is a useful conversation starter, but equal rent and mortgage payments do not make renting and buying financially equivalent. Ownership adds upfront and ongoing costs, while renting and buying offer different flexibility, risks and potential benefits.
What the calculator result means
The tool converts weekly rent into a mortgage repayment, then estimates the loan balance that payment could support over several terms. The displayed property value assumes an 80% loan-to-value ratio, meaning a 20% contribution before purchase costs. It does not calculate lender-assessed borrowing capacity.
Treat the result as a repayment comparison only. A lender may assess your income and commitments using a higher serviceability rate, and the amount it is prepared to lend could be lower or higher depending on your full circumstances.
Costs of buying that rent does not show
Buying can require a deposit, transfer duty, registration, conveyancing, inspections and finance costs. Owners also pay for rates, insurance, repairs and maintenance, and apartment owners may pay body corporate levies. These costs should sit alongside the mortgage payment in a household budget.
Some first-home buyers may receive concessions or use an eligible guarantee scheme, but those benefits do not remove every cost. Keep a cash buffer for settlement adjustments and unexpected repairs.
Costs and benefits of continuing to rent
Renting can provide flexibility to move and may require less upfront capital. The owner is generally responsible for major property maintenance, although renters still face moving costs, bond requirements and the possibility of rent increases or a tenancy ending.
The deposit you do not put into a property may be saved or invested, but that outcome depends on behaviour and market returns. A useful comparison considers what happens to the difference in cash flow rather than assuming it disappears.
Interest rates, time horizon and property assumptions
A higher interest rate supports a smaller loan for the same repayment. Test more than one rate, including a buffer above current offers. Your likely ownership period also matters because large transaction costs are spread over time; buying for a short period can produce a different result from staying for many years.
Property values and rents can rise or fall, and neither outcome is guaranteed. Avoid making the decision from a single growth forecast. Consider location, property condition and whether the home will remain suitable if your household changes.
When to speak with a mortgage broker
A broker can assess income, expenses, debts, deposit sources and credit limits against different lender policies. This is particularly useful for self-employed applicants, buyers using a small deposit, investors, people with variable income or anyone who has recently changed jobs.
Request a borrowing assessment before treating a property price as affordable. You should also seek independent legal and financial advice where appropriate; the choice to rent or buy involves more than selecting a loan.
Rent versus buy calculator FAQs
If my mortgage repayment equals my rent, can I afford to buy?
Not necessarily. Matching the mortgage repayment to your rent is only a cash-flow comparison. You still need a suitable deposit and purchase costs, plus room for council rates, insurance, maintenance, body corporate fees where applicable and possible interest-rate increases. A lender will separately assess your verified income, expenses, debts, credit limits, dependants and the property. Use the result as a starting point, then request a full borrowing assessment before setting a purchase budget. Ask a broker whether buying may be realistic for you
Does this calculator show my borrowing capacity?
No. It only converts your current rent into a mortgage repayment of the same amount and estimates the loan that payment could service at the selected rate and term. Real borrowing capacity also depends on verified income, employment type, living expenses, personal and home loans, credit card limits, dependants, deposit size, credit history and lender-specific serviceability buffers. Because policies vary between lenders, a broker can compare several assessments and explain which commitments are limiting the result. Request a personalised borrowing assessment
Is renting always cheaper than buying?
No. The answer depends on how long you expect to stay, purchase and selling costs, interest rates, rent increases, maintenance and ownership expenses, and what you do with any difference in cash flow. Buying may offer stability and exposure to property value changes, while renting may offer flexibility and preserve capital for other goals. Test several scenarios and seek advice rather than relying on a single growth or interest-rate assumption. Understand the home buying process
