RENT vs BUY

A worked example (Auckland, 2026)

Most people compare their rent to a mortgage repayment, see the mortgage is bigger, and go: "See? Buying's a rip-off."

That's not the comparison.

Buying comes with a stack of costs that don't build you a single dollar of equity - rates, insurance, maintenance, and the interest chunk of your mortgage. And renting has a hidden cost of its own: the deposit you didn't lock into a house could've been out there working for you instead.

So let's run some actual numbers.

Say you're eyeing an $800,000 townhouse. You've got a 20% deposit ($160,000), leaving a $640,000 mortgage at 5.5%. Add roughly $3,000 a year in rates, $1,500 in insurance, and $2,000 keeping the place from falling apart. The alternative? Renting the same place for $650 a week.

In the early years, renting almost always looks cheaper. Most of your mortgage payment is just interest - money gone, no equity gained - and the upfront costs of buying are brutal.

But stretch the timeline out, and buying tends to claw ahead. You're chipping equity into the house every month, and (historically) riding long-term price growth, while the renter's rent just keeps climbing.

Where's the tipping point? Depends entirely on your rate, your deposit, and how long you stay put. And with mortgage rates creeping back up through 2026, that break-even year is sitting further out than it was twelve months ago.

Punch your own numbers in above and find your break-even year.

What most rent vs buy comparisons get wrong

Here's the bit almost everyone skips: what you actually do with the money you're not sinking into a house.

If renting frees up your deposit and a few hundred bucks a month, that money doesn't have to sit in a savings account doing nothing.

Invested - consistently, over the same years - it changes the whole equation. For some people, "rent and invest the difference" genuinely beats buying.

That's not me telling you to rent forever. It's me telling you to do the maths honestly.

Renting is only "throwing money away" if you take the money you saved and throw it away.

Every hundred bucks you invest instead of burn is another brick in your empire. If you want to see how investing the difference actually plays out over years - with real numbers - [that's the whole journey I document here → link to /updates/].

Rent vs buy FAQs

Is it cheaper to rent or buy in NZ right now?

Short term? Renting usually wins - especially in Auckland, where the median house sits around $1,005,000 and median rent about $635 a week. Long term, buying tends to come out ahead as you build equity. But with mortgage rates climbing again through 2026, the break-even point has drifted further out. Run your own numbers above.

How much deposit do I need to buy instead of rent?

Banks save their sharpest rates for buyers with a 20% deposit. You can get in with less - some lenders and the First Home Loan scheme allow 5% - but you'll usually cop a low-equity premium on your rate, which tilts the maths back toward renting. Model both and see.

Isn't renting just throwing money away?

Only if you spend the difference. Buying has its own dead money - mortgage interest, rates, insurance, maintenance. None of that builds equity either. The real question isn't rent vs buy. It's rent-and-invest-the-difference vs buy.

What costs does buying have that renting doesn't?

Council rates, insurance, maintenance and repairs, body corporate fees (apartments and some townhouses), and the interest slice of your mortgage. Real, recurring, and exactly the costs people conveniently "forget" when they compare a mortgage to their rent.

Should I rent and invest the difference instead of buying?

For some people, yes - especially if you move around a lot, live somewhere with sky-high prices relative to rent, or would have to stretch yourself thin to buy. The catch: you have to actually invest the money you save. Every month. Not let it leak into Uber Eats and weekend brunches. The calculator lets you set an expected return so you can watch it play out.

This calculator and page are general information only and not financial advice. Everyone's circumstances will vary - always do your own research and consult your own financial professionals before making decisions.