Break-even rent
R13,464 / month
If similar places rent for less than R13,464/mo, renting may be cheaper. If they rent for more, buying may win.
Assumes you'd invest the deposit and extra costs if you rented. Most people don't.
Rent or buy?
Work out the monthly rent where renting and buying cost about the same, with SA buying costs and what your deposit could have earned baked in.
The home
The home loan
Default is today's SA prime lending rate (10.5%).
Monthly home loan repayment
R16,174
Growth
Home growth vs rent escalation drive this a lot (defaults 5% / 6%).
How we got there
Follow the cash: what you put in, what you pay while you live there, and what you get back when you sell. That story sets the break-even rent above.
1. Cash you put in up front
Total cash at purchase
R284,222
Deposit
R180,000
Transfer duty
R21,786
Lawyer fees (transfer + bond)
R79,936
Other buying costs / renovations
R2,500
2. Costs while you live there (7 yrs)
Home loan repayments
R1,358,595
Principal repaid
R246,435
Interest
R1,112,160
On a long home loan, most of what you pay is interest.
Rates, upkeep, insurance, utilities, levies
R558,133
3. What you get back when you sell
Sale price
R2,532,781
Minus agent commission
-R151,967
Minus capital gains tax
-R0
Minus still owing on the home loan
-R1,373,565
Cash you walk away with
R1,002,249
If you rented instead
Cash a renter would pay over the same stay, at the break-even rent (it rises each year).
Rent over the stay
R1,356,153
Utilities + contents insurance
R216,517
So break-even rent is R13,464/month (then rises each year). The tip already includes what the deposit and extra costs could have earned if invested. We don't show that growth as a cash line next to the sale, because it isn't money in your pocket.
Sources & assumptions
- Transfer duty from the SARS schedule (SARS Transfer Duty tables effective 1 April 2025 (unchanged 1 April 2026)).
- LSSA Conveyancing Fee Guidelines effective 1 July 2026 (excl. VAT; +15% VAT applied).
- Main-home capital gains exclusion defaults to R3,000,000 from 1 March 2026. See SARS Budget 2026 FAQ. Inclusion rate 40%.
- Default home loan rate is SA prime (10.5%; ≈ repo + 3.5pp).
- Break-even rent approach is in the same spirit as Rolling Alpha's rent-or-buy calculator. Assumes you would invest the deposit and any monthly saving if you rented.
A planning tool, not financial, tax, or legal advice. Home loan rates are usually floating in SA. We treat the rate you enter as constant.
