Buy vs Lease Commercial Premises Calculator

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.