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 December 2025, Sydney has the largest gap between mortgage repayments and rent, with average monthly mortgage payments at $7,275, compared to $3,211 for rent.
  • 46% of Australian renters are struggling to afford their rent.
  • The highest levels of rental stress are in the Tasmania (78%), followed by Victoria (64%).
  • 39% of mortgage holders are facing financial strain, with the most significant challenges in Tasmania (69%) and Western Australia (62%).

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 $7,275, compared to $3,211 for rent.

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

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 major issue for many Australians, particularly those on lower incomes. Latest figures from the Australian Bureau of Statistics show the average weekly earnings for full-time adults are $2,051. While homeownership remains largely out of reach for minimum-wage earners, renting is generally a more realistic 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 latest survey from December 2025 shows that 46% of Australians are struggling to pay rent, highlighting ongoing pressure from the housing affordability crisis.

Rental stress differs across the states, with Tasmania recording the highest level at 78%, followed by Victoria at 64%. The Australian Capital Territory reported lower levels, with 29% of renters saying they are struggling.

Mortgage holders are also facing pressure, with 39% saying they are struggling to meet their home loan repayments.

The level of stress varies across the states, with Tasmania reporting the highest share at 69%, followed by Western Australia at 62%. The Australian Capital Territory recorded the lowest level, with 32% of borrowers reporting difficulties with repayments.

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 57 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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