The mortgage is not the cost of owning

“If I'm paying $600 a week in rent, I might as well be paying off a mortgage.” It's one of the most common things people say about buying. It sounds right, and it leaves out most of the cost. So let's do the maths properly, with one example: a $650,000 house, 20% deposit, 6% interest over 30 years, against $600 a week in rent. Year one only.

In this example, owning costs about 1.5 times the rent each week, before any change in the home's value. Does that mean renting wins? Not necessarily. Homes can grow in value and rent goes up, so the answer depends on your plans, your area and how long you'll stay. Make the call on all the numbers, including the ones the repayment leaves out.

Example inputs: council and water $2,000 a year, insurance $1,500, maintenance 1% of the price, and 4% a year that the deposit could otherwise earn. These are illustrations, not market figures. The calculator in the free course uses your own numbers.