Rent vs Buy Break-Even Calculator NZ

This calculator works out how many years of ownership it takes before buying a home in New Zealand works out cheaper than renting, once the upfront and ongoing costs of ownership are weighed against the rent you would otherwise pay and the equity you build as house prices rise. Buying carries large upfront costs, such as legal fees and other buying and selling costs, that take time to recoup, so your break-even point shows whether your likely time in the home favours buying or renting. You enter the house price, your mortgage rate, expected house price growth, the weekly rent for a similar home, your yearly ownership costs (rates, insurance and upkeep), and the buying and selling costs involved in the purchase. The calculator steps through each year, weighing mortgage interest, ownership costs and the spread-out purchase costs against the rent you would have paid, offset by the equity gained from rising prices, and returns the number of years until buying pulls ahead, plus your yearly ownership cost and yearly rent for comparison. A shorter time in the home tends to favour renting, while a longer stay usually favours buying. This is a simplified model that ignores the opportunity cost of your deposit and tax, and it assumes steady price growth, so treat the result as an indicative estimate rather than financial advice.

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3 years
years of ownership at which buying beats renting
Yearly ownership cost$56,750
Yearly rent$36,400

A simplified model: it weighs mortgage interest and ownership costs and buying and selling costs against rent and house price growth on the full price. It ignores the deposit's opportunity cost and tax. Future growth is uncertain. Estimate only, not financial advice.

How it works

The calculator steps through each year of ownership, adding the cost of owning, which is the mortgage interest on the price plus rates, insurance and upkeep plus the one-off buying and selling costs spread out, and comparing the running total against the rent you would have paid, offset by the equity gained from house price growth. The break-even is the first year where owning comes out cheaper than renting over the period.

Worked example

On a $750,000 home with a 6.5% rate, 4% price growth, $700 a week rent and $8,000 a year costs, buying breaks even at around 3 years, because the assumed 4% growth on the full price builds equity quickly. If you expect to move within a year or two of buying, renting could be the cheaper choice; if you will stay longer, buying wins. Lower the growth rate and the break-even moves out, since equity is what pulls it forward.

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Frequently asked questions

What is the rent vs buy break-even point?

It is the number of years you would need to own a home for buying to work out cheaper than renting, once the upfront and ongoing costs of owning are offset by house price growth and the rent you would have paid. Below that, renting is often cheaper.

Why does the break-even matter?

Buying has large upfront costs that take time to recover. If you might move within a few years, you could be better off renting; if you will stay long term, buying usually wins. The break-even tells you which side of that line you are on.

What drives the break-even up or down?

Higher buying costs and interest push the break-even out, while strong house price growth and high rent bring it forward. Because future growth is uncertain, treat the result as a guide, not a guarantee.