For many Australians, the move from renting to owning marks a major financial milestone. While renting offers flexibility, homeownership may offer long-term stability. But it also introduces a new set of costs, responsibilities, and rewards. If you're thinking of making the jump, understanding what’s ahead is crucial.
Key differences between renting and owning
While both renting and owning offer a place to live, they represent fundamentally different approaches to housing. Choosing between the two often comes down to lifestyle needs, financial readiness, and long-term goals.
Monthly costs
Renters typically pay a fixed monthly amount that covers housing and sometimes utilities. Homeowners, on the other hand, pay a mortgage, which may fluctuate if the loan has a variable interest rate. In addition to the mortgage, owners must cover property taxes, insurance, and all maintenance costs themselves.
Here is a side-by side comparison of the median rent and mortgage repayment prices in the major cities of Australia as of September 2025.
|
Rent |
Median house price |
Mortgage repayment* (p/w) |
|
|---|---|---|---|
|
Sydney |
$841 |
$1,550,563 |
$1,860 |
|
Melbourne |
$638 |
$953,454 |
$1,144 |
|
Brisbane |
$719 |
$1,062,109 |
$1,274 |
|
Adelaide |
$654 |
$912,084 |
$1,094 |
|
Perth |
$741 |
$895,089 |
$1,074 |
|
Hobart |
$605 |
$729,091 |
$875 |
|
Darwin |
$743 |
$667,313 |
$801 |
|
Canberra |
$725 |
$1,021,834 |
$1,226 |
Data from Cotality
*Assumes a 20% deposit, a 30-year loan term, and a 6% p.a. interest rate
Upkeep and repairs
As a renter, you're generally off the hook for fixing things like leaking taps, faulty wiring, or a broken water heater as those are typically the landlord’s responsibility. It’s a convenience that many renters take for granted until they become homeowners.
When you own a home, the full responsibility for both routine maintenance and unexpected repairs falls on you. These tasks not only demand time and planning but can also be a significant financial burden.
Allianz reports that Australians spend an average of $3,400 per year just on regular home upkeep. But the real financial sting comes from unexpected repairs. Water damage alone can cost anywhere between $5,000 and $30,000, depending on the severity. And costs for things like foundation repairs, pest infestations, or major appliance failures can be just as steep.
Flexibility vs stability
Most rental agreements are short-term, typically lasting 6 to 12 months. This gives renters the freedom to move relatively easily, whether it’s for a new job opportunity, a change in personal circumstances, or simply the desire for a lifestyle change.
With fewer long-term obligations, renters can adapt quickly to life’s unexpected turns without the burden of selling a property or dealing with the real estate market. On the other hand, this can be anxiety-inducing should a landlord not renew your lease and you’re left having to search for a new home.
Homeownership, on the other hand, often involves a much deeper commitment, both financially and geographically. Buying a home usually makes the most sense when you plan to stay in one place for several years. That’s because there are significant upfront costs that can take years to recoup. Additionally, the process of selling a home is time-consuming and can be unpredictable, depending on the housing market.
Equity and investment
When you rent, your payments go directly to the landlord. While this covers your housing needs, it doesn’t give you any long-term financial return. No matter how many years you rent, you don’t gain any ownership or equity in the property. You’re essentially paying for the right to live there, with no assets to show for it down the line.
Owning a home, however, turns your monthly payments into an investment. With every mortgage payment, a portion goes toward reducing the principal, while another portion covers interest. Over time, as you pay down the principal and your home (hopefully) increases in value, you build equity, which is the difference between what your home is worth and what you still owe on it.
This equity is more than just a number on paper. It can significantly increase your net worth and give you financial flexibility. Many homeowners use their equity to borrow against their home for renovations, education costs, or even to invest in additional property through options like home equity loans or lines of credit.
Legal and financial responsibility
Owning a home comes with more legal and financial responsibility. Homeowners must deal with property taxes, insurance, HOA fees (if applicable), and the legal obligations that come with owning land or a structure. Renters, by contrast, are typically only responsible for rent and basic upkeep of their unit.
Read more: Buying vs renting in Australia
What to know before you start house hunting
Before attending open houses or browsing listings online, prospective buyers should take time to prepare. House hunting is not just about finding the right property, it’s about making informed financial and personal decisions that will shape your future.
Assess your financial capacity
Before you start browsing listings or attending open homes, take a close look at your financial situation. This means evaluating your total household income, current debts (like car loans, student loans, or credit card balances), existing savings, and monthly expenses.
The goal is to figure out how much you can comfortably afford to spend on a mortgage each month, not just what you could stretch to cover.
Don’t just budget for loan repayments, factor in extra costs like council rates, insurance, maintenance, and unexpected repairs. A budget that doesn’t account for these extras could leave you financially exposed down the line.
One of the biggest upfront costs is going to be stamp duty. You might be under the property price threshold if you’re a first home buyer, but it can still add up to thousands.
Online mortgage calculators can offer a helpful starting point. Run the numbers using InfoChoice’s home loan calculator to see your estimated repayments, monthly, fortnightly, or weekly, in just a few clicks.
See Also:
Get pre-approved for a mortgage
Getting mortgage pre-approval signals to sellers and real estate agents that you’re a serious, qualified buyer. In competitive markets, this can give you a real edge, especially when multiple offers are on the table.
It also gives you a clear and realistic understanding of your budget. Based on your income, credit score, savings, debts, and overall financial history, a lender will assess how much they’re willing to lend you and at what interest rate. Even a small difference in rates can significantly impact your repayments and the total cost of the loan over time.
You can use the table below to browse and compare a range of home loans side by side to pinpoint the lender with the lowest rates that suit your needs.
| Lender | Home Loan | Interest Rate | Comparison Rate* | Monthly Repayment | Repayment type | Rate Type | Offset | Redraw | Ongoing Fees | Upfront Fees | Max LVR | Lump Sum Repayment | Extra Repayments | Split Loan Option | Tags | Features | Link | Compare | Promoted Product | Disclosure |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
5.29% p.a. | 5.33% p.a. | $2,773 | Principal & Interest | Variable | $0 | $530 | 90% |
| Promoted | Disclosure | ||||||||||
5.24% p.a. | 5.15% p.a. | $2,758 | Principal & Interest | Variable | $0 | $0 | 80% |
| Disclosure | |||||||||||
5.39% p.a. | 5.43% p.a. | $2,805 | Principal & Interest | Variable | $0 | $530 | 90% |
| Promoted | Disclosure |
Identify your must-haves vs nice-to-haves
Make a list of your priorities. This can include number of bedrooms, school district, or proximity to work, and be ready to compromise on non-essential features. The clearer your needs, the more focused your search will be.
Unlike a lot of rentals, as it’s your home, you can decorate and renovate to your tastes. So, with this in mind, when you’re hunting for property, consider prioritising things you can’t change like solar orientation, block size and shape, strata/non strata, layout, and noise/location.
Research neighbourhoods thoroughly
Location impacts not only home value but quality of life. Look into safety, schools, local amenities, commute times, and future development plans. Spend time in the area during different parts of the day to get a feel for it.
Understand the timeline
Buying a home can take weeks or months. From searching and making an offer to inspections, financing, and settlement, the process requires patience. Being prepared for delays, especially in competitive markets, can help reduce stress.
How to financially prepare for home ownership
Start saving for a down payment
As a renter, your upfront housing costs may have been limited to a bond and a few moving expenses. But buying a home comes with a much larger initial investment: the down payment.
While some loans allow as little as 5% down, many experts recommend saving 20% to lower your long-term costs and avoid lenders mortgage insurance (LMI). This can take years of saving, unless you use assistance available to first home buyers, such as the 5% Deposit Scheme.
Build and check your credit
Unlike renting, where approval often depends on rental history and proof of income, mortgage lenders scrutinise your credit score and history closely. A higher score can help you lock in lower interest rates, saving you thousands over the life of the loan.
Before applying, check your credit report for errors, pay down existing debt, and hold off on opening new credit lines. Your bank will also want to see steady employment and good savings history. Building strong credit now can make your move into homeownership much more affordable.
Reevaluate your budget
Owning a home introduces a more complex financial picture compared to renting. Beyond the mortgage, you’ll need to budget for property taxes, homeowners insurance, maintenance, utilities, and possibly body corporation or strata fees.
A good rule of thumb is to keep total housing costs under 28% to 30% of your gross monthly income. If you’re used to predictable rent payments, prepare for variable (and often higher) monthly expenses.
Plan for upfront costs
Buying a home in Australia means you’ll also also need to budget for upfront costs. These may include conveyancing or legal fees, stamp duty, loan establishment fees, building and pest inspections, and title searches.
It's essential to factor these costs into your budget early to avoid any last-minute surprises at settlement.
Build an emergency fund
In a rental, a leaking pipe or broken appliance usually means a quick call to the landlord or property manager. As a homeowner, you are the landlord and the repair bills are yours to cover.
Setting aside an emergency fund is crucial to cover unexpected issues like a faulty water heater, roof damage, or job loss. Aim for at least three to six months' worth of living expenses to stay financially secure.
How ownership can pay off over time
Unlike rent, which covers your living costs without building value, mortgage payments gradually increase your equity or the portion of your home you own outright. As property values rise over time, so does your equity, helping to grow your net worth.
This growing equity can be used to your advantage. It can serve as a financial cushion, give you access to home equity loans or lines of credit, or help fund major life goals like renovations, education, or even purchasing a second property.
Some key financial benefits to home ownership include:
-
Equity growth: Each mortgage payment reduces your loan balance and increases your ownership stake in the property.
-
Capital gains: If property values rise, you could potentially net a solid return if you sell, or use that equity to fund another property purchase without necessarily having a cash deposit.
-
Wealth building: Long-term home ownership can significantly boost personal wealth, especially when compared to decades of renting. This can provide stability in retirement when the paycheques stop rolling in.
-
Borrowing power: Built-up equity can be tapped for future loans, acting as security for large expenses or investments.
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Stability and predictability: A landlord can turf you out with sufficient notice, or decide not to renew your lease; as long as you keep on top of your mortgage payments, it’s likely no one’s going to do that if you are a homeowner.
