Own vs Rent & Invest
Compare home equity with investing while renting, on equal cash budgets.
All amounts NZD · Examples are editable · Entries stay in this browser session and are not saved
Owning a home
Renting and investing
The deposit is the default starting investment. Both households start with $150,000; unused owner cash is also invested. Each month, whichever household has lower housing costs invests the saving.
No money is borrowed to fund an investment shortfall. If renting costs more, the comparison assumes both can afford that higher monthly outlay, and the owner invests the difference.
Try one change
Showing: your baseline. Each scenario changes just one baseline input.
View chart values
| Year | Owner total wealth | Renter portfolio | Home equity only |
|---|---|---|---|
| 0 | $150,000 | $150,000 | $150,000 |
| 1 | $179,868 | $180,273 | $179,868 |
| 2 | $210,866 | $211,103 | $210,866 |
| 3 | $243,041 | $242,489 | $243,041 |
| 4 | $276,444 | $274,428 | $276,444 |
| 5 | $311,129 | $306,918 | $311,129 |
| 6 | $347,152 | $339,955 | $347,152 |
| 7 | $384,569 | $373,534 | $384,569 |
| 8 | $423,443 | $407,649 | $423,443 |
| 9 | $463,839 | $442,293 | $463,839 |
| 10 | $505,823 | $477,456 | $505,823 |
| 11 | $549,466 | $513,128 | $549,466 |
| 12 | $594,844 | $549,298 | $594,844 |
| 13 | $642,034 | $585,951 | $642,034 |
| 14 | $691,118 | $623,071 | $691,118 |
| 15 | $742,182 | $660,642 | $742,182 |
| 16 | $795,319 | $698,644 | $795,319 |
| 17 | $850,622 | $737,054 | $850,622 |
| 18 | $908,192 | $775,849 | $908,192 |
| 19 | $968,135 | $815,001 | $968,135 |
| 20 | $1,031,440 | $855,546 | $1,030,562 |
Which assumptions change the outcome most?
Ranked by the absolute change in the final owner-minus-renter wealth gap. Positive changes favour owning; negative changes favour renting.
| One change from baseline | Owner minus renter wealth | Change in gap |
|---|---|---|
| House growth +1 point | $464,653 | +$288,759 |
| House growth −1 point | -$64,229 | -$240,123 |
| Mortgage rate +1 point | -$3,793 | -$179,687 |
| Investment return +1 point | $25,659 | -$150,235 |
| Investment return −1 point | $303,664 | +$127,771 |
| Rent growth +1 point | $297,820 | +$121,926 |
So what does this actually mean?
Under these assumptions, owning finishes ahead by $175,894. Owning builds equity through loan repayment and changes in house value; renting can free money to invest when its housing costs are lower.
The selected scenario uses 3% house growth, 5% investment return, 6% mortgage interest and 3% rent growth. These sustained rates are assumptions, not predictions. Both sides receive the same total starting capital and cash budget; if renting is more expensive, the owner’s extra investment is included in owner wealth.
Small changes can reverse the result. Compare the ranked scenarios, and investigate buying/selling costs, tax, maintenance surprises and realistic rent before drawing conclusions. Ownership costs are fixed here, while rent increases annually; that simplification can materially affect longer comparisons. Lifestyle and security also matter beyond the final number.
Understand this tool
What this calculator is showing you
A month-by-month comparison of housing and investing. The renter invests the difference whenever owning costs more; if renting costs more, the owner invests the difference instead. Both have the same starting resources and monthly outlay.
How to use it
- Enter purchase and mortgage details, annual ownership costs, rent and investment assumptions.
- The initial investment starts at your deposit; editing it sets the common starting resources to the larger of those two amounts.
What the result means
Owner net wealth is home equity plus any invested savings. Renter net wealth is the investment portfolio. The chart also shows property equity separately. Neither side is treated as the universal winner.
Things this calculator does not know
Buying and selling costs, tax on property sales, moving costs, rent or mortgage eligibility, market volatility and differences in housing quality. Investment return must be after tax, before the annual dollar fee entered. Ownership costs stay fixed; rent and property value grow at the rates you enter.
Try changing this
Test lower house growth, lower investment returns, a higher mortgage rate and faster rent increases. The sensitivity table ranks changes in the final wealth gap, not statistical predictions.
Scenario prepared 30/10/2026. Assumptions and results are illustrative.