Rent vs Buy Calculator (South Africa) ☆ Stoor
🎯 Maak jy gereed om ’n huis te koop?
Beantwoord 5 vinnige vrae vir ’n persoonlike plan om bond-ready te wees en jou huis te beskerm.
The comparison is closer than most people assume
"Renting is throwing money away" is the most repeated line in South African property, and it is not quite right. When you rent you buy accommodation and avoid maintenance, rates, insurance and illiquidity. When you buy, a large share of your early instalments is interest — which is also money you do not get back.
The real question is whether ownership's costs and equity beat renting plus disciplined saving of the difference — which is exactly what the calculator above tests.
What the buying side genuinely costs
Include all of it or the comparison flatters ownership:
- Upfront: transfer duty (nil below R1,210,000 under the restructured 2026 bands — see the transfer duty calculator), conveyancing, separate bond registration costs, Deeds Office fees, and rates/levy clearance;
- Ongoing: rates, levies if sectional title, homeowner's insurance, and maintenance — the cost that quietly transfers to you on transfer day and that most first-time buyers underestimate;
- Interest. At prime (10.50%) over 20 years, total interest frequently approaches or exceeds the purchase price. See the bond calculator;
- On exit: agent's commission, typically a meaningful percentage of the sale price.
The tax side, which is genuinely favourable
One real advantage for owner-occupiers: the primary-residence CGT exclusion of R3 million of gain (raised from R2m in Budget 2026), plus a separate concession disregarding the whole gain where proceeds are R2 million or less. Most South Africans selling the home they live in pay no capital gains tax at all.
That does not apply to a second property or a rental — see the CGT calculator.
What actually decides it
Two variables dominate the result, and neither is the rent-versus-instalment comparison people focus on:
1. How long you will stay
Transaction costs — duty, conveyancing, bond registration, and commission on exit — are large and paid at both ends. Over a short period they swamp any equity built, which is why buying with an uncertain horizon is usually the weaker choice. The longer you stay, the better buying looks.
2. Whether you actually save the difference
Renting only wins if the gap is genuinely banked. A bond is forced saving — the instalment happens whether or not you feel disciplined that month. Renting requires you to do it voluntarily, and most people do not.
So be honest with yourself: if the difference will be absorbed by living, the calculator's renting scenario is not your renting scenario. If you will genuinely invest it — in a TFSA or a diversified portfolio — renting becomes far more competitive.
Reading the result honestly
- Property growth is an assumption, not a fact. Be conservative; South African house prices have gone through long flat periods in real terms;
- Rent inflation matters — model realistic annual increases on the renting side too;
- Property is illiquid. Selling takes months, and you cannot sell part of a house if you need cash;
- Concentration. Buying puts a very large share of your net worth into one asset in one suburb.
Frequently asked questions
Is renting really wasted money?
No more than the interest portion of a bond is. You are paying for accommodation either way — the question is total cost versus equity built, which is what this compares.
How long must I stay for buying to win?
Long enough to recover the upfront and exit costs from equity and growth. That is usually several years — run your own numbers rather than trusting a rule of thumb.
What if I get a rental increase every year?
Model it. Rent typically rises with inflation while a bond instalment moves only with interest rates — that divergence is one of ownership's genuine long-run advantages.
Should I buy to rent it out instead?
Different calculation entirely: rental income is taxable, and the primary-residence CGT exclusion does not apply. Model it separately.
Does the calculator include maintenance?
Include a realistic allowance in the ongoing costs — it is the most commonly omitted item and it is not small.
Prime is currently 10.50%. Transfer duty bands and the R3 million primary-residence CGT exclusion are the 2026/27 values. Results depend heavily on assumptions about growth, rent inflation and how long you stay — treat them as a framework, not a forecast. General information, not financial advice.