Renting vs Owning: What's cheaper long-term?

It’s one of the biggest questions people ask when deciding on their future:
“Is it really cheaper to rent than to buy a home?”

At first glance, renting might seem cheaper. No large deposit, no interest payments, no maintenance headaches. But when you zoom out and look at the bigger picture—especially over 10, 20, or 30 years—owning a home is not only often cheaper in the long run, it can also build wealth.

Let’s dive into the numbers and explain why.

The cost of renting

According to Domain’s March 2025 Rental Report, the median weekly rent in combined capital cities is now $650 per week. That’s $2,817 per month, or $33,800 per year.

Now let’s project that over 30 years, with a modest 4% annual increase (which reflects typical inflation and rent growth patterns).

Here’s what a renter could pay:

Year 1 rent: $33,800
Total over 30 years (with 4% annual increases): $1.89 million

That’s right—if rent continues rising by just 4% per year, you could pay nearly $1.9 million over the next 30 years!

And that money? It’s gone straight into someone else’s mortgage. Not yours.

Want to see how much rent you could be paying over the years? Try our free rent calculator

The cost of owning a home

Let’s say you buy a $600,000 home with a 30-year mortgage and an interest rate of 6% (which is roughly the average variable rate in 2025).

Your estimated repayments:

Weekly repayments: $899/week
That’s $46,748 per year
Over 30 years: $1.4 million in total repayments

At the end of 30 years:

You own the home outright.
You’re no longer making repayments.
The property has likely increased in value substantially.

Capital growth makes a big difference:

CoreLogic reports that the average annual capital growth for homes in Australia has been around 6.8% over the past 30 years.

If your $600,000 home grows in value by 6.8% each year:

In 30 years, it could be worth over $4.3 million

Even if the growth is slower—say 4–5%—you’re still likely to end up with a home worth 2–3x more than what you paid for it.

What’s the verdict?

Let’s compare side-by-side:

Renting

Owning

Initial costs
Low (bond + moving costs)

Ongoing cost (year 1)
$31,200

30-year total (4% annual increase)
$1.89 million

Asset value after 30 years
$0

Ownership status
None, rent cycle continues

Initial costs
High (deposit, stamp duty, fees)

Ongoing cost (year 1)
$46,748

30-year total (6% interest rate)
$1.4 million

Asset value after 30 years
$4.3 million (based on 6.8% annual growth)

Ownership status
Fully owned home

Why renting feels cheaper

Let’s be fair—renting has its advantages:

Lower entry costs
More flexibility to move
No property maintenance bills or council rates

For some people, especially those moving frequently or not ready to commit financially, renting is the right short-term choice.

But it’s important to recognise the long-term cost:

You’re still spending a lot—potentially more than someone paying off a mortgage. And unlike a home loan, rent doesn’t build equity. It doesn’t give you a saleable asset. It just disappears each week.

Are you ready to buy?

If you’re tossing up between renting and buying, here are a few signs it might be time to consider homeownership:

You’re financially stable and can manage a deposit (or access a low deposit scheme)
You’re planning to stay in the same area for a few years
You want to start building long-term wealth and equity
You’re paying high rent that could cover a mortgage instead

Did you know: Many renters will pay enough rent to cover 1-3 mortgages in a lifetime. The sooner you own, the sooner you can put your hard-earned cash into an asset that benefits you long-term!

Final thoughts

While renting can be a practical choice in the short term, owning a home almost always wins in the long run—both financially and emotionally. With rent continuing to rise and property values steadily increasing, the sooner you buy, the sooner you start investing in your future.

Start the journey to home ownership