i What this calculator does
Quick answer: A rent vs buy calculator compares how much wealth you build by buying a home with how much you would build by renting a similar home and investing the money you did not spend on the deposit, transfer costs and higher monthly costs. With the default inputs (a R2 million home, 10% deposit, R15 000 rent), buying overtakes renting in year 9 and is about R137 000 ahead after 10 years.
The answer depends mostly on how long you stay. Buying carries large one-off costs, such as transfer duty, conveyancing and the agent's commission when you sell, and those take years of property growth to recover. Stay a short time and renting usually wins; stay long enough and buying usually does.
This calculator is for educational purposes only. Results are estimates based on the figures you enter and current published rates, not financial or tax advice.
How to use the Rent vs Buy Calculator
Every field has a default, so the calculator works straight away. Change the price, rent and how long you plan to stay first, because those three move the answer most.
- 1. Property price (R)
- 2. Deposit (%) Most banks want 10% or more for a better rate
- 3. Bond interest rate (%) Prime is 10.75% at a 7.25% repo rate
- 4. Bond term (years)
- 5. Monthly rent for a similar home (R)
- 6. Annual rent increase (%) Also used for rates, levies and insurance
- 7. Annual property growth (%) Long-run house price growth in your area
- 8. Return on invested savings (% a year) What the renter earns on the money not spent
- 9. Rates, levies and insurance (R a month) Owner costs a tenant does not pay
- 10. Maintenance (% of value a year)
- 11. Years you plan to stay
- 12. Buying costs excluding transfer duty (R) Conveyancing and bond registration fees
- 13. Selling costs (% of sale price) Agent commission, often 5% to 7.5% plus VAT
- 14. Your marginal tax rate Used only if the gain exceeds the R3 million exclusion
The result panel reports:
- Better after your horizon Whether buying or renting leaves you with more net worth
- Break-even year The first year in which buying is ahead
- Monthly bond repayment The repayment on the loan after your deposit
The arithmetic is laid out below the result, in the order it was performed.
See also: Bond Affordability Calculator and Home Loan Repayment Calculator.
Common results
What the calculator returns as the number of years you stay changes, with every other default unchanged.
| Years in the home | Buyer net worth | Renter net worth | Ahead |
|---|---|---|---|
| 3 years | R446 323 | R660 412 | Renting by R214 089 |
| 5 years | R746 198 | R914 572 | Renting by R168 374 |
| 10 years | R1 695 164 | R1 558 133 | Buying by R137 031 |
| 15 years | R3 303 798 | R2 397 381 | Buying by R906 417 |
| 20 years | R6 211 471 | R3 688 668 | Buying by R2 522 804 |
Figures used in this calculator
The South African figures this calculator relies on, and where each one comes from.
- Transfer duty scale 2026/27: no duty up to R1,210,000, then 3% to 13% in bands. Source: SARS transfer duty table (verified 2 November 2026).
- Primary residence exclusion: the first R3 million of the gain on your main home is not taxed. Source: Capital Gains Tax Rates and Exclusions (verified 2 November 2026).
- CGT on the rest: 40% of the gain above the exclusions is added to your income. Source: Capital Gains Tax Rates and Exclusions (verified 2 November 2026).
- Annual CGT exclusion: R50,000. Source: Capital Gains Tax Rates and Exclusions (verified 2 November 2026).
- Prime rate: 10.75%, with the repo rate at 7.25%. Source: SARB Repo Rate History (verified 2 November 2026).
How the calculation works
The calculator runs both choices month by month for the number of years you plan to stay. The buyer pays the deposit, transfer duty and buying costs up front, then the bond repayment, rates, levies, insurance and maintenance every month. The renter pays only the rent.
The key assumption is that the renter is disciplined: the money the buyer spends up front is invested on day one, and every month whoever pays less invests the difference at your chosen return. Rent, rates and levies rise each year by the rent increase you enter; the home's value rises by the property growth rate.
At the end of each year the buyer's net worth is the home's value less the bond still owed, the selling costs and any capital gains tax, plus anything the buyer invested in months when owning cost less than renting. The renter's net worth is their investment pot. The year-by-year table under the result shows both.
A worked example in rand
With the defaults, a R2 million home with a 10% deposit needs about R293 786 in cash: the R200 000 deposit, R33 786 transfer duty and R60 000 buying costs. The R1.8 million bond at 10.75% over 20 years costs R18 274 a month, and with rates, levies and maintenance owning costs about R22 479 a month in year one, against R15 000 rent.
The renter invests the R293 786 and the R7 479 monthly gap. For the first eight years that investment pot is worth more than the buyer's equity. By year 9 the home, growing at 5% a year while the bond shrinks, overtakes it, and after 10 years buying is about R137 000 ahead.
How to read the result
The break-even year is the most useful number. If you are confident you will stay well beyond it, buying is likely to be the better financial choice at these assumptions; if you might move sooner, renting is safer. A gap of a few percent of the home's value between the two outcomes is within the margin of error of the assumptions, so treat a close result as a draw.
Three inputs move the answer most: property growth against the investment return, the rent compared with the price (the rental yield), and how long you stay. The rental yield calculator shows whether rents in your area are high or low relative to prices.
The South African angle
Buying in South Africa carries unusually high one-off costs. Transfer duty starts above R1.21 million and reaches 13% at the top, conveyancing and bond registration fees add tens of thousands, and agents typically charge 5% to 7.5% plus VAT when you sell. Those costs are why short stays usually favour renting.
Bond rates follow prime, which moves with every SARB decision, so a 1 percentage point rise changes the monthly repayment noticeably; the home loan repayment calculator shows by how much. On the other side, the first R3 million of the gain on your primary residence is free of capital gains tax, while a renter investing outside a tax-free savings account pays tax on returns, which this comparison does not deduct.
Spotted an outdated figure? If a rate, limit or formula in this calculator no longer matches its source, email us the page and the source. A material correction is dated on the Updates Log.
See also: Dividend Withholding Tax Calculator and Estate Duty Calculator.
Frequently asked questions
Is it better to rent or buy in South Africa?
It depends mainly on how long you stay. Buying carries transfer duty, legal fees and selling costs that take several years of growth to recover, so short stays usually favour renting and long stays usually favour buying.
What is the break-even year?
The first year in which your net worth from buying, after selling costs and any tax, is higher than the net worth you would have from renting and investing the difference.
Does the calculator include transfer duty?
Yes. It applies the 2026/27 SARS transfer duty scale to the price you enter. If you buy from a VAT-registered developer, transfer duty does not apply and you can set the price accordingly.
Why does renting win in the early years?
Because the buyer has spent the deposit and transfer costs, and would pay selling costs if they sold, while the renter's money is still invested and growing.
Is the renter's investment taxed?
The calculator does not deduct tax on the renter's returns. Investing through a tax-free savings account avoids that tax up to the annual and lifetime limits; outside one, the renter's result would be somewhat lower.
Do I pay capital gains tax when I sell my home?
Only on a gain above R3 million on your primary residence, after the annual exclusion. Most home sales fall below that, so the calculator usually shows no CGT.
What investment return should I use?
Use a realistic long-run return for how you would actually invest, after fees. A balanced fund or a mix of shares and bonds is a common reference; a higher return favours renting.
Does this replace advice from a bond originator or adviser?
No. It is an educational comparison built on your assumptions. Banks set your actual rate and deposit based on your credit profile.
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