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Rent vs Buy Calculator

Compare renting with buying the same home: what you’d have after you sell, including rates, insurance and what your deposit could earn if you invested it.

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A week

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Years before you’d sell or move

More options· Growth, investment return and the costs of owning
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Growth a year

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Growth a year

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Return a year

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% of value a year

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% of value a year

Years

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A year

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A month: condo, strata or service charges

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Taxes and fees, % of price

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Agent and legal fees, % of value

Buying leaves you better off by

$16,184

After 7 years, once the home is sold and costs are paid

Buying pays off after
6 years
Owning, first month
$4,577/mo

What this means

Compare rent with the costs of owning you don’t get back, not the whole mortgage payment. In the first year those come to about $3,803 a month (mortgage interest, council rates, repairs and insurance), against rent of $3,033 a month.

Buying comes out ahead from year 6. Until then, the $8,000 it costs to buy, and the costs of selling, haven’t been earned back. You plan to stay long enough.

Next step

What you’d have, year by year

YearBuyingRenting
1$168,722$195,504
2$202,626$223,691
3$237,757$252,576
4$274,163$282,170
5$311,893$312,488
6$350,999$343,544
7$391,534$375,350

How it’s compared

  • Buying: what the home is worth when you sell, minus the mortgage left and the costs of selling.
  • Renting: the deposit and buying costs you’d have invested instead, growing at 5% a year.
  • Each month, whichever costs less invests the difference, so both spend the same.
Assumptions in this estimate
  • Rates, growth and returns stay the same every year. Mortgage insurance, tax breaks on home sales and tax on investment returns aren’t included: use an after-tax return for the investments.
  • Insurance and other owner costs rise with rent each year.
Spotted a mistake? Tell us

How the calculator works

The calculator follows two people from the same starting point:

  • The buyer pays the deposit and costs to buy, such as legal fees and a building inspection, then the mortgage, rates, insurance and repairs. When they sell, they keep the home’s value minus the mortgage left and the costs of selling.
  • The renter invests the deposit and costs to buy instead, and pays rent.

Each month, whoever pays less invests the difference, so both spend the same. The result is who has more after the years you choose.

Example

An $800,000 home with a $160,000 deposit, at 5% over 30 years, against rent of $700 a week:

Amount
Owning, first month $4,577
Mortgage repayment $3,436
After 7 years Buying ahead by about $16,000
Buying pays off after 6 years

It’s close: if your investments would earn 7% a year instead of 5%, renting comes out ahead by about $28,000.

What matters most

  • House price growth: small changes make a big difference over time.
  • Your mortgage rate when it refixes: most fixes last 1 to 3 years, so the rate can change.
  • Insurance: premiums have risen fast, especially in areas at risk of flooding or earthquakes.

See what you could borrow with the how much can I borrow calculator, or read is renting dead money?

Last updated

Frequently asked questions

Is it cheaper to rent or buy in New Zealand?

It depends most on how fast house prices grow, your mortgage rate and how long you stay. There’s no stamp duty in New Zealand, so buying costs less up front than in many countries, but agent fees when you sell are high.

Isn’t rent just dead money?

Owning has costs you don’t get back too: mortgage interest, rates, insurance and repairs. Only the part of the repayment that pays off the loan builds wealth. If those costs are more than rent and you invest the difference, renting can leave you better off.

What should I enter for costs to sell?

Real estate agents often charge around 3% of the price, plus GST, and there are legal fees and marketing costs. The calculator starts at 3%.

What about tax on the gains?

Selling your own home is usually tax-free; the bright-line test doesn’t apply to your main home. Investment returns are taxed, often at your PIR in a PIE fund such as KiwiSaver, so enter an after-tax return.