How the comparison works
The calculator simulates both choices month by month:
- Buyer: pays the deposit, transfer duty (from the SARS table) and attorney costs upfront, then the bond repayment plus ownership costs each month. Wealth = property value − bond balance (+ anything invested in months when renting would have cost more).
- Renter: invests the buyer’s upfront cash on day one, pays rent each month and invests the difference whenever the buyer’s monthly cost is higher. Wealth = the investment portfolio.
Rent and ownership costs rise once a year by the rates you choose; property values and investments grow monthly at the equivalent of your annual rates.
What is not included
Agent commission when selling, capital gains tax, tax on investment returns, and the non-financial benefits of owning (security, freedom to renovate) or renting (flexibility).
Worked examples
R1.5 million home vs R11 000 rent over 10 years
The buyer pays the bond, rates, levies and maintenance; the renter invests the deposit, transfer costs and the monthly difference. Which comes out ahead depends heavily on property growth versus investment returns.
Buying
- Upfront cash (deposit, transfer duty, costs)
- R218 700
- Transfer duty (official) Official
- R8 700.00
- Monthly bond repayment
- R13 705.59
- Interest paid over 10 years
- R1 299 932
- Ownership costs over 10 years
- R395 424
- Total cash spent on buying
- R2 258 795
- Estimated property value Your assumption
- R2 220 366
- Estimated equity (value less bond)
- R1 215 106
The same choice over 20 years
Over a longer period the bond is paid off and the buyer’s monthly costs fall to ownership costs only, which usually favours buying.
Buying
- Upfront cash (deposit, transfer duty, costs)
- R218 700
- Transfer duty (official) Official
- R8 700.00
- Monthly bond repayment
- R13 705.59
- Interest paid over 20 years
- R1 939 342
- Ownership costs over 20 years
- R1 103 568
- Total cash spent on buying
- R4 611 610
- Estimated property value Your assumption
- R3 286 685
- Estimated equity (value less bond)
- R3 286 685
Frequently asked questions
Is it better to rent or buy in South Africa?
It depends on how long you will stay, the price-to-rent ratio in your area, interest rates, and how disciplined you are about investing the difference if you rent. Buying tends to win over long periods; renting can win over short periods or when prices grow slowly.
Why does the renter invest money?
To compare fairly, both people spend the same amount each month. The buyer’s upfront cash (deposit, transfer duty and fees) and any monthly cost above rent are invested by the renter instead.
What growth rate should I use for property?
Be cautious. National house price indices have, over many recent years, grown at or below consumer inflation, though some areas did better. Try a few rates to see how sensitive the answer is.