By Chaice Paterson, CEO & Founder, Low Deposit Homes | Updated June 2026

The conventional wisdom is that buying costs more than renting. In 2026, the maths often points the other way. A first home buyer using Help to Buy on an $800,000 South East Melbourne new build has weekly mortgage repayments of around $685 — competitive with renting a comparable property. A 5% Deposit Scheme buyer in Ipswich paying around $1,070/week on an $850,000 home is paying more than the $620/week to rent a similar property nearby — but that $450/week gap goes into equity, not into someone else’s mortgage. At Low Deposit Homes we run this comparison on every discovery call. The “rent is cheaper” assumption deserves to be tested with actual figures, because for most first home buyers in 2026 it’s no longer true.

Are Mortgage Repayments Really Similar to Rent?

For Help to Buy eligible buyers, yes. Real example:

Pakenham 4-bedroom new build, $800,000, Help to Buy:

• Your loan after 40% government equity: $464,000
• Weekly repayment at 6%, 30 years: ~$685/week
• Comparable Pakenham 4-bedroom rental: $580–$720/week

The cost of ownership is essentially identical to renting — but with one critical difference: every mortgage payment builds your equity. Every rent payment builds your landlord’s.

For 5% Deposit Scheme buyers (higher income, no government equity), repayments are higher than rent — typically by $300–$500/week — but the equity build offsets that gap quickly.

“I tell every client this: rent is dead money. You’re paying off someone else’s mortgage. With Help to Buy, you can be paying about the same amount weekly and you’re paying off your OWN mortgage. That’s the difference between standing still and building wealth — and the only thing standing between most first home buyers and that switch is showing them the actual numbers.” — Chaice Paterson, founder of Low Deposit Homes

How Much Do I Need to Earn to Buy?

For a $750,000 new build (North Melbourne) under the 5% Deposit Scheme: combined household income of $115,000–$135,000.

For an $800,000 new build (SE Melbourne) under the 5% Deposit Scheme: combined household income of $125,000–$145,000.

For a $1M new build (SE QLD) under the 5% Deposit Scheme: combined household income of $150,000–$170,000.

For Help to Buy applicants, the lower loan size means significantly lower income requirements — $100,000–$140,000 combined household income typically supports a $750K–$850K purchase.

If you’re a single buyer, plan on $110,000+ to comfortably service a $750K+ new build under the 5% scheme, or $85,000+ for Help to Buy on a similar property.

Buying vs Renting: A Real 10-Year Scenario

Take a couple renting at $620/week in Pakenham, looking at an $800K Help to Buy purchase:

Renting for 10 years:

• Annual rent year 1: $32,240
• Annual rent year 10 (assuming 3% increase per year): $42,071
• Total rent paid over 10 years: ~$370,000
• Equity built: $0
• Net position after 10 years: Same as starting (minus the $370K paid)

Buying with Help to Buy:

• Year 1 annual mortgage on $464K loan: $35,620 ($685/week)
• Mortgage stays largely fixed (excluding rate movements)
• Year 1 principal repayment: ~$9,400 (yours)
• Year 1 capital growth at conservative 3%: ~$24,000 (40% to government, 60% to you = $14,400)
• Equity built over 10 years (conservative): $260,000+
• Net position after 10 years: $260K+ wealthier than the renter

The buyer comes out approximately $260,000 ahead over 10 years. That’s the wealth-building difference between owning and renting.

What If Interest Rates Go Up?

Honest answer: rising rates increase your mortgage repayments and reduce borrowing capacity. Two interest rate movements since early 2025 have reduced typical buyer borrowing capacity by approximately 8–12%.

But the same dynamic affects renters too. Rising rates typically translate into rising rents (often more sharply than rates rise) because landlords pass costs through. The impact isn’t asymmetric — both buyers and renters feel rate movements, but only buyers also build equity.

Can I Still Save While Paying a Mortgage?

Yes — and this is where the offset account becomes critical. An offset is a savings account linked to your mortgage. Every dollar in offset reduces the principal the bank charges interest on. Real numbers:

• $10,000 in offset = approximately 6 years cut off a 30-year loan term
• Adding $250/week into offset = loan halved from 30 years to 15 years

The wealth-building works because you’re paying down your own debt instead of someone else’s. Your “savings” become equity rather than sitting in a low-interest savings account.

What If Property Prices Drop?

Property values can fall — the Australian market has had periods of stagnation or decline (notably 2017–2019, 2022–2023). But:

• Long-term, property in genuine growth corridors has appreciated
• If you hold for 5+ years, you’re typically well ahead of short-term price movements
• Renting through a price drop means you still pay rent and have no equity to ride the rebound

A buyer who enters at sensible value and rides a short-term price drop is typically still better off long-term than the renter who didn’t buy at all.

Frequently Asked Questions

Are mortgage repayments really similar to rent?

For Help to Buy eligible buyers, often yes — the government’s 40% equity share dramatically reduces the loan size, so weekly repayments come in at $620–$700 on an $800K SE Melbourne property or $570–$650 on a $750K North Melbourne property. For 5% Deposit Scheme buyers (higher income, no government equity), repayments are higher than equivalent rent, but the difference goes into building your own equity rather than your landlord’s.

What if interest rates go up after I buy?

Rising rates increase mortgage repayments and reduce borrowing capacity. Two rate movements since early 2025 have reduced typical borrowing capacity by 8–12%. However, rising rates also typically translate into rising rents (often more sharply), so the impact isn’t asymmetric. Locking in a fixed-rate portion of your loan is one common hedge against rate movements.

How much do I need to earn to buy a first home?

For a $750K North Melbourne new build under the 5% Deposit Scheme, plan on combined household income of $115K–$135K. For an $800K SE Melbourne new build, $125K–$145K. For a $1M SE QLD new build, $150K–$170K. For Help to Buy applicants, $100K–$140K combined typically supports a similar property because the loan size is smaller. Lender choice significantly affects how much you can borrow on the same income.

Can I still save while paying a mortgage?

Yes — and offset accounts are the key. Every dollar in offset reduces the principal the bank charges interest on. $10,000 in offset cuts roughly 6 years off a 30-year loan. Adding $250/week into offset can halve your loan term. The “saving” is actually faster debt reduction, which builds equity more quickly than holding money in a savings account.

What if property prices drop after I buy?

Property values can fall, and the Australian market has had multiple periods of stagnation. The protections: hold for 5+ years to ride short-term cycles, choose quality growth corridors with strong owner-occupier demand, and don’t overextend. A buyer who enters at sensible value and rides a short-term price drop is typically still better off long-term than the renter who didn’t buy at all.

Ready to See If Buying Beats Renting for You?

Book a free 15-minute consultation with Low Deposit Homes — Book your free call | Call 1800 920 172

We’ll run the funding worksheet on YOUR numbers. Twenty minutes, no obligation, and you’ll see exactly what your real weekly cost of ownership looks like compared to what you’re paying in rent right now.

Low Deposit Homes operates under Winning Homes Australia Pty Ltd (ACN 633 321 758). All deposit calculations are indicative and based on general scenarios. Individual circumstances may vary. Government grant eligibility is subject to assessment by the relevant authority. This guide is for informational purposes and does not constitute financial advice.