How the comparison works

The calculator runs a month-by-month simulation for both scenarios. The buyer pays bond instalments, rates, levies, and maintenance. The renter invests the deposit and reinvests the monthly cost difference (the amount by which buying exceeds renting each month). Net worth is compared at the end of your chosen horizon: property equity minus selling costs vs investment portfolio.

Why buying often loses in the short term

South African bond rates are high relative to rental yields. A buyer on a 20-year bond at 12.5% pays mostly interest for the first 10+ years — equity accumulates slowly. A renter who invests the deposit at 8% and pockets the monthly cost savings compounds that capital quickly. Buying typically only wins past year 15–25 at typical SA assumptions.

The break-even year

Break-even is the first year where buying net worth exceeds the renter's portfolio. If it falls outside your horizon, renting remains more advantageous for your circumstances — but that may still be the right choice for non-financial reasons.

Assumptions applied

• Property appreciation uses a constant annual rate. The FNB House Price Index showed 4.9% year-on-year to Oct 2025 — but real (inflation-adjusted) returns have been negative in most provinces outside the Western Cape.
• Bond registration and legal costs are estimated at 4% of purchase price — a conservative blended figure for attorney fees and Deeds Office fees.
• Estate agent commission on sale is 6% + 15% VAT = 6.9%, the standard SA rate.
• The renter's deposit earns the stated investment return — this assumes active investment in a balanced unit trust or TFSA, not cash.
• Rental deposit (held in trust) is returned at face value with no investment return applied.
• The simulation uses the constant buying monthly cost at each point in time. In reality, once the bond is paid off, buying becomes significantly cheaper.

What this calculator doesn't account for

• Does not model bond insurance, life cover attached to the bond, or homeowner's insurance beyond the maintenance estimate.
• Does not account for capital gains tax on the sale of either the property or the investment portfolio.
• Does not model rent increases tied to your specific lease — the constant escalation rate is an average.
• Transfer duty uses SARS 2025/26 brackets. A new development purchase has R0 transfer duty — toggle the purchase type if applicable.
• Does not model the psychological and lifestyle value of owning vs renting.