Buy vs Lease Commercial Premises Calculator NZ 2026
This calculator compares the annual cost of buying your business premises against leasing them in New Zealand, one of the biggest decisions a established business makes. Leasing keeps cash free, is flexible, and avoids tying up capital, but the rent is money gone forever and is usually reviewed upward over time. Buying requires a substantial deposit and a commercial mortgage, but every payment builds equity in an asset you own, the property may appreciate, and you control your own premises. The trade-off is rarely obvious because the two options are paid for so differently: a lease is a simple annual rent, while ownership mixes interest, which is a true cost, with principal repayments, which build equity rather than disappear. This tool cuts through that. You enter the property price, your deposit percentage, the mortgage interest rate and term, the annual rent for an equivalent lease, the yearly ownership outgoings such as rates, insurance and maintenance, and a comparison period. The calculator estimates the annual mortgage repayment, then shows the lease annual cost, the buy annual cash cost, and a buy net cost that credits back the equity, the principal, you build in the first year, so you compare like with like. It also shows the deposit you would need to find. Use it to weigh owning against renting, to test how the deposit and interest rate change the picture, and to start a conversation with your accountant and bank. Importantly, this model is deliberately conservative: it does not include capital gains on the property, depreciation, or the tax treatment of interest and rent, all of which can favour buying. Treat it as a structured starting point, not a complete analysis, and get professional advice before committing.
Conservative: excludes capital gains, depreciation and tax treatment, which often favour buying. Equity credit uses first-year principal. Get advice.
How it works
The loan is the price less your deposit. The annual mortgage repayment is the standard principal-and-interest payment over the term. The buy cash cost adds that repayment and the ownership outgoings. The buy net cost subtracts the first-year principal, the equity you build, since that is saving rather than spending. The lease cost is the annual rent.
Worked example
An $800,000 property with a 30 percent deposit means a $560,000 loan. At 7 percent over 20 years the repayment is about $52,100 a year. Adding $12,000 outgoings gives a buy cash cost of about $64,100. Around $12,900 of the first year is principal, so the buy net cost is about $51,200, just under the $55,000 lease, before counting any capital gain, which would favour buying further.
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