A lot of people feel like renting is cheaper — and week-to-week, it often is. But when you zoom out over the long term, the difference between renting for 30 years and owning for 30 years is massive.
Here’s the simplest way to compare the two.
1. Renting for $650/week (with 4% yearly increases)
Let’s say you rent for $650 per week, and your rent goes up by 4% each year — which is pretty normal in today’s market.
Here’s what that looks like long-term:
- Year 1 rent = $33,800 per year
- Rent increases every year by 4%
- Over 30 years, total rent paid = $1.89 million
You finish the 30 years with:
- $0 in equity
- $0 ownership
- And your rent continues rising after that
Rent feels cheaper upfront because the weekly number is predictable and you’re not responsible for maintenance — but over decades, it’s extremely expensive.
2. Owning a $600,000 home today (5% interest rate)
Now let’s compare that to buying a $600,000 home today with:
- 5% deposit = $30,000
- Loan amount = $570,000
- Interest rate = 5%
- Loan term = 30 years
- Property growth = 6% per year
Your repayments over 30 years:
- Monthly repayment = $3,059
- Yearly = $36,700
- Over 30 years = $1.10 million
- Total cost including deposit = $1.13 million
Now compare that to renting:
- Renting costs = $1.89 million
- Owning costs = $1.13 million (including deposit and interest)
That’s a difference of roughly $760,000 — in favour of owning.
Now let’s look at value.
Property value after 30 years (6% growth)
$600,000 growing at 6% annually for 30 years becomes:
= $3.44 million
So after the loan is fully paid off, you own a home worth about $3.4 million — even if you never upgraded.
3. Renting vs owning: the real comparison
Why renting feels cheaper short-term:
- Lower upfront commitment
- No maintenance or rates
- You’re not locked into a mortgage
But owning wins long-term because:
- Rent rises — mortgage payments eventually stop
- You build equity instead of paying a landlord
- Your property value grows every year
- You end up with an asset worth millions
- Total long-term cost is often lower than renting
- After 30 years, you own your home outright — rent never ends
Renting is paying someone else’s mortgage.
Owning is paying your own future.
4. What renters should consider
If you’re renting now, it’s worth asking yourself a few simple questions: Can I comfortably afford repayments right now? Am I better off turning my rent into equity? And what will it cost me if I don’t buy and rents keep rising?
Renting can feel easier in the short term, but over the long term, owning almost always puts you in a stronger position — so the real question isn’t just “Is renting cheaper?”, it’s “What will put me in a better place 10–30 years from now?”
