Renting vs. Owning in Australia

Finder's research examines whether renting or paying off a mortgage is more affordable in the current housing market.

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By

Graham Cooke

Updated

Fact checked

The debate over whether it is cheaper to rent or buy a property has never been more relevant, particularly for low-income earners navigating Australia’s challenging housing market. Finder’s latest research sheds light on the cost-effectiveness of homeownership compared to renting.

Key Statistics

  • As of January 2025, Sydney has the largest gap between mortgage repayments and rent, with average monthly mortgage payments at $5,249, compared to $3,131 for rent.
  • Darwin is the only city where mortgage repayments ($2,434) are lower than average rent ($2,618), making homeownership the more affordable option.
  • 48% of Australian renters are struggling to afford their rent.
  • The highest levels of rental stress are in the ACT (71%) and Queensland (51%).
  • 36% of mortgage holders are facing financial strain, with the most significant challenges in Western Australia (49%) and South Australia (43%).

Comparing Monthly Costs: Renting vs. Owning

Across major Australian cities, mortgage repayments generally exceed rental costs, making renting the more affordable option. Sydney has the largest gap, with average monthly mortgage repayments at $5,249, compared to $3,131 for rent.

This trend is also evident in Melbourne, Brisbane, Adelaide, Perth, Hobart and Canberra, where mortgage costs surpass rent by several hundred dollars.

Darwin is the only exception, with average mortgage repayments ($2,434) lower than rent ($2,618), suggesting homeownership may be a more viable option there.

Monthly Amortization vs Rent

Pros and Cons of Owning

Pros of OwningCons of Owning
  • Builds home equity over time
  • Stability and no risk of eviction by a landlord
  • Freedom to renovate and personalize the space
  • High upfront costs (deposit, stamp duty, legal fees)
  • Ongoing maintenance and repair costs
  • Less flexibility to move

Pros and Cons of Renting

Pros of RentingCons of Renting
  • Lower upfront costs, with no need for a large deposit or stamp duty
  • Greater flexibility to move as needed
  • No responsibility for major property maintenance
  • No equity building, meaning no long-term financial investment
  • Rent prices can increase over time
  • Limited ability to modify or personalize the property

Can a minimum wage earner afford a mortgage?

Affordability remains a pressing issue for many Australians, particularly those on lower incomes. Latest figures from the ABS show the average weekly earnings for full-time adults sit at $1,976. While homeownership remains largely unattainable for minimum-wage earners, renting is generally a more viable option for low-income households.

With property prices, interest rates and the cost of living continuing to rise, buying a home has become increasingly out of reach without financial support or a dual income. The higher cost of mortgage repayments compared to rent reinforces the notion that renting is the more practical choice for those earning lower wages.

Australia's Housing Struggles in 2025

Finder’s April 2025 survey shows that 48% of Australians are experiencing rental stress. The pressure is not evenly distributed across the country, with the ACT (71%) and Tasmania (78%) recording the highest levels, while South Australia (33%) and NSW (43%) report comparatively lower rates.

Mortgage stress is also on the rise, with 36% of homeowners struggling to meet their loan repayments. Western Australia (49%) and South Australia (43%) are bearing the brunt, while the ACT and Tasmania (both 24%) report the lowest levels of mortgage-related financial strain.

Final Thoughts

The decision between renting and buying depends on individual circumstances. Renting offers greater flexibility and lower upfront costs, while homeownership provides long-term financial benefits through equity building.

However, in the current market, homeownership remains out of reach for many Australians, particularly those on lower incomes. With housing affordability an ongoing national concern, it is crucial for individuals to carefully assess their financial situation, lifestyle needs and long-term goals before making a decision.

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Written by

Head of Consumer Research

Graham Cooke is Finder’s Head of Consumer Research, overseeing data analysis on consumer spending and saving habits. He is a passionate advocate for financial literacy and consumer rights, regularly appearing on major TV networks like ABC News and 7 News, and contributing to top outlets like Yahoo Finance and Money Magazine. Graham holds a Bachelor of Science (Hons) in Physics, as well as Tier 1 and Tier 2 certifications (RG 146) that comply with ASIC standards. See full bio

Graham's expertise
Graham has written 59 Finder guides across topics including:
  • Home loans and the housing market
  • Credit cards & personal finance
  • Finder Awards
  • Retail economics & FMCG
  • Travel
  • Finder's RBA Cash Rate Survey, Consumer Sentiment Tracker, Cost of Living Pressure Gauge and Property Investment Index
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