Compare the projected wealth outcome of buying now with a 5% deposit against waiting 1, 2, 3, or 5 years to save a 20% deposit, at wealth snapshots of 10, 15, and 30 years. The model accounts for ongoing rent payments, property price growth during the waiting period, and the cost difference in LMI and interest between the two deposit levels.
How does the math work?
For each scenario, we project property value and loan balance year by year using compound growth and standard amortisation. 'Buy Now' starts with your current savings as deposit. 'Wait N years' adds your monthly saving for N years, applies compounding rent during the wait, then enters the property market at the (higher) future price. Net wealth = property equity minus rent paid during any waiting period.
What is the break-even growth rate?
The growth rate at which waiting and buying now produce the same net wealth at year 10. Above the break-even rate, prices rise faster than you can save - so buying now locks in today's price and benefits more from appreciation. Below it, your savings accumulate faster relative to price rises, and waiting may give you a better deposit position.
Why does rent count even when I'm not buying?
Rent is an ongoing cost during the waiting period that does not build equity. Every dollar of rent is gone. The tool deducts total rent paid during the wait from net wealth, because it represents money that does not compound into your deposit or property position.
What about investment returns on my savings while I wait?
This tool assumes savings sit in cash during the wait period - a conservative assumption. If you invest your savings (e.g. in a HISA, ETFs, or super via FHSS) you could achieve higher growth on your deposit. For FHSS-specific modelling, see the FHSS Calculator.
Does this account for LMI (lenders mortgage insurance)?
Yes. If any scenario has a deposit below 20%, we apply an estimated LMI cost to the loan balance. Buy Now under the First Home Guarantee (5% deposit, government-backed) avoids LMI entirely - but FHG places are capped each financial year, and you need to meet eligibility criteria.
What growth rate should I assume?
National long-run real growth is often cited at 3-4% p.a. (before inflation adjustment). However, performance varies dramatically by suburb and time period. Use the slider to stress-test your decision at multiple rates rather than anchoring on a single number.
Is this financial advice?
No. This tool provides general calculations to help you understand the mathematical trade-offs. It does not account for your personal tax situation, employment security, lifestyle priorities, or local market conditions. Speak with a licensed financial adviser before making property decisions.