Buy your home. Or rent and invest?
Compare the household cost and long-term position of owning your home or renting while investing.
Starting cash: $280,000 each · Monthly budget: $6,000 each · Marginal tax rate: 32% · First FY: 2026–27
Your starting point
Same cash available to each scenario · updates liveStarting cash reduces borrowing when “Use available cash” is selected. The monthly budget funds holding costs; any surplus stays in cash. It is not an extra loan repayment or an offset.
Shared assumptions
The entered marginal rate includes any applicable Medicare levy. It assumes deductions can be used at that rate. Other net rental income affects loss use only; its cashflow is common to both sides and excluded.
Your comparison over 20 years
Net gain after all personal cash · year 20
Net gain after all personal cash · year 20
| The figures, side by side | Own your home | Rent + invest |
|---|---|---|
| 01 / Property & purchase fundingOne-off amounts | ||
| Property price ($) | ||
| Capital growth (%) | ||
| Gross rental yield (%) | Not applicable | |
| Purchase costs (%) | ||
| Purchase costs ($) | $50,000 | $37,500 |
| Total purchase + costs | $1,050,000 | $787,500 |
| Funding method | ||
| Cash to retain ($) | ||
| Personal cash used to buy | $280,000 | $280,000 |
| Cash retained after purchase | $0 | $0 |
| Total borrowing at purchase | $770,000 | $507,500 |
| Total borrowing / property price | 77.0% | 67.7% |
| Loan interest (%) | ||
| Loan repayment | ||
| 02 / Rental income & expensesYear one · per year | ||
| Gross rental income | $0 | $33,750 |
| Less vacancy | $0 | -$1,298 |
| Rent collected | $0 | $32,452 |
| Other expenses ($/year) | ||
| Rates, insurance, maintenance & other expenses | -$6,000 | -$5,500 |
| Property management | $0 | -$2,596 |
| Total operating expenses | -$6,000 | -$8,096 |
| Loan interest | -$47,484 | -$31,296 |
| Principal repaid (builds equity) | -$9,108 | -$6,003 |
| Rent you pay | $0 | -$33,800 |
| Cashflow before tax | -$62,592 | -$46,744 |
| 03 / Tax & personal holding costYear one · per year | ||
| Depreciation ($/year) | Not applicable | |
| Tax eligibility | Owner occupied | |
| Taxable rental profit / (loss) | $0 | -$14,941 |
| Estimated tax saving / (cost) | $0 | $4,781 |
| Cashflow after tax | -$62,592 | -$41,963 |
| After-tax cashflow / week | -$1,204 | -$807 |
| Personal budget available | $72,000 | $72,000 |
| Extra personal cash required | $0 | $0 |
| Cash retained at end of year one | $9,408 | $30,037 |
| Rental losses carried forward (year one) | $0 | $0 |
| 04 / Long-term positionAt year 20 · before sale costs & CGT | ||
| Projected property value | $2,653,298 | $1,989,973 |
| Remaining loan balance | $420,969 | $277,457 |
| Property equity | $2,232,329 | $1,712,516 |
| Cash held separately | $154,889 | $452,079 |
| Net assets: equity + cash | $2,387,218 | $2,164,596 |
| Starting personal cash | $280,000 | $280,000 |
| Regular budget contributed | $1,440,000 | $1,440,000 |
| Additional personal cash contributed | $0 | $0 |
| Total personal cash contributed | $1,720,000 | $1,720,000 |
| Net gain after all personal cash | $667,218 | $444,596 |
How the net gain builds
Net gain = property equity + cash held − all personal cash contributed. Purchase costs, holding costs and additional cash top-ups are included. Before sale costs and CGT.
Year-by-year balances & cash contributions
| Year | Measure | Own your home | Rent + invest |
|---|---|---|---|
| Year 0 | Loan balance | $770,000 | $507,500 |
| Cash held | $0 | $0 | |
| Personal cash contributed | $280,000 | $280,000 | |
| Net gain | -$50,000 | -$37,500 | |
| Year 1 | Loan balance | $760,892 | $501,497 |
| Cash held | $9,408 | $30,037 | |
| Personal cash contributed | $352,000 | $352,000 | |
| Net gain | -$53,484 | -$35,960 | |
| Year 2 | Loan balance | $751,203 | $495,111 |
| Cash held | $18,666 | $59,454 | |
| Personal cash contributed | $424,000 | $424,000 | |
| Net gain | -$54,037 | -$32,782 | |
| Year 3 | Loan balance | $740,896 | $488,318 |
| Cash held | $27,770 | $88,227 | |
| Personal cash contributed | $496,000 | $496,000 | |
| Net gain | -$51,501 | -$27,872 | |
| Year 4 | Loan balance | $729,931 | $481,091 |
| Cash held | $36,716 | $116,333 | |
| Personal cash contributed | $568,000 | $568,000 | |
| Net gain | -$45,708 | -$21,128 | |
| Year 5 | Loan balance | $718,267 | $473,403 |
| Cash held | $45,501 | $143,749 | |
| Personal cash contributed | $640,000 | $640,000 | |
| Net gain | -$36,484 | -$12,443 | |
| Year 6 | Loan balance | $705,859 | $465,225 |
| Cash held | $54,121 | $170,449 | |
| Personal cash contributed | $712,000 | $712,000 | |
| Net gain | -$23,642 | -$1,704 | |
| Year 7 | Loan balance | $692,659 | $456,525 |
| Cash held | $62,570 | $196,407 | |
| Personal cash contributed | $784,000 | $784,000 | |
| Net gain | -$6,988 | $11,207 | |
| Year 8 | Loan balance | $678,617 | $447,270 |
| Cash held | $70,846 | $221,595 | |
| Personal cash contributed | $856,000 | $856,000 | |
| Net gain | $13,685 | $26,417 | |
| Year 9 | Loan balance | $663,679 | $437,425 |
| Cash held | $78,944 | $245,986 | |
| Personal cash contributed | $928,000 | $928,000 | |
| Net gain | $38,593 | $44,057 | |
| Year 10 | Loan balance | $647,789 | $426,952 |
| Cash held | $86,858 | $269,548 | |
| Personal cash contributed | $1,000,000 | $1,000,000 | |
| Net gain | $67,964 | $64,267 | |
| Year 11 | Loan balance | $630,884 | $415,810 |
| Cash held | $94,586 | $292,251 | |
| Personal cash contributed | $1,072,000 | $1,072,000 | |
| Net gain | $102,041 | $87,196 | |
| Year 12 | Loan balance | $612,902 | $403,958 |
| Cash held | $102,121 | $314,063 | |
| Personal cash contributed | $1,144,000 | $1,144,000 | |
| Net gain | $141,076 | $112,998 | |
| Year 13 | Loan balance | $593,772 | $391,350 |
| Cash held | $109,460 | $334,950 | |
| Personal cash contributed | $1,216,000 | $1,216,000 | |
| Net gain | $185,337 | $141,837 | |
| Year 14 | Loan balance | $573,422 | $377,937 |
| Cash held | $116,596 | $354,877 | |
| Personal cash contributed | $1,288,000 | $1,288,000 | |
| Net gain | $235,106 | $173,888 | |
| Year 15 | Loan balance | $551,774 | $363,669 |
| Cash held | $123,526 | $373,806 | |
| Personal cash contributed | $1,360,000 | $1,360,000 | |
| Net gain | $290,681 | $209,333 | |
| Year 16 | Loan balance | $528,744 | $348,491 |
| Cash held | $130,245 | $391,699 | |
| Personal cash contributed | $1,432,000 | $1,432,000 | |
| Net gain | $352,375 | $248,364 | |
| Year 17 | Loan balance | $504,246 | $332,344 |
| Cash held | $136,745 | $408,516 | |
| Personal cash contributed | $1,504,000 | $1,504,000 | |
| Net gain | $420,518 | $291,186 | |
| Year 18 | Loan balance | $478,185 | $315,167 |
| Cash held | $143,024 | $424,215 | |
| Personal cash contributed | $1,576,000 | $1,576,000 | |
| Net gain | $495,458 | $338,012 | |
| Year 19 | Loan balance | $450,461 | $296,895 |
| Cash held | $149,073 | $438,751 | |
| Personal cash contributed | $1,648,000 | $1,648,000 | |
| Net gain | $577,562 | $389,069 | |
| Year 20 | Loan balance | $420,969 | $277,457 |
| Cash held | $154,889 | $452,079 | |
| Personal cash contributed | $1,720,000 | $1,720,000 | |
| Net gain | $667,218 | $444,596 |
How these figures are calculated
Purchase funding = price + purchase costs − cash used. “Use available cash” uses starting cash less the chosen reserve; “Borrow purchase + costs” retains all starting cash. All acquisition debt uses the entered interest rate and loan type.
Interest-only loans retain their principal. Principal and interest loans amortise monthly over the entered term. The monthly cash budget funds annual holding costs, with surplus held separately; it does not reduce the loan or act as an offset. Cashflows and tax settle annually, so within-year cash needs may differ.
Both scenarios start with $280,000 and a $6,000 monthly budget. Positive opening cash earns 0% after tax. Expenses grow 2.5% annually. Personal cash includes starting funds, the regular budget and any additional holding-cost top-ups. The equal-cash check compares annual checkpoints, not just final totals.
Tax uses the entered 32% marginal rate, not a household tax return. Depreciation is a non-cash deduction for the selected period. The affected-established illustration quarantines excess rental losses from FY 2027–28; earlier years use immediate deductions. Eligible other rental income can absorb losses; unused losses carry forward. Grandfathered treatment requires eligibility and is not an election for a new purchase.
No sale, CGT, super, pension or automatic land-tax assessment is included. Include relevant holding costs in “Other expenses”. Tax reform context · Legislation. Model v2.0.0.
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