Rent vs Buy Calculator
Buying is not automatically better than renting. This compares your net worth under both paths — including the return you would earn by investing the down payment instead.
Net worth after 10 years if you BUY
₹98,47,177
home worth ₹1,43,26,782 less ₹44,79,605 still owed
Net worth after 10 years if you RENT
₹1,31,39,728
down payment plus monthly savings, invested
| Over 10 years | Buying | Renting |
|---|---|---|
| Monthly outgo at the start | ₹55,541 | ₹25,000 |
| Upfront cost | ₹22,40,000 | Invested instead |
| Interest / rent paid | ₹47,44,487 | ₹41,44,934 |
| Maintenance and tax | ₹8,00,000 | Paid by landlord |
| Total cash out | ₹97,04,882 | ₹41,44,934 |
Over 10 years, renting leaves you about ₹32,92,551 better off on these assumptions. The result is very sensitive to how long you stay: the upfront 8% in stamp duty and registration takes years of appreciation to recover.
Assumes 8% of the price in stamp duty, registration and interiors, and 1% a year in maintenance and property tax. The renting case invests the down payment and every rupee by which the EMI plus upkeep exceeds the rent. Home loan tax benefits are not modelled.
How to use
- 1Enter the property price, your down payment and the home loan terms.
- 2Enter what a similar home costs to rent, and how fast rents rise in your area.
- 3Set property appreciation and the return you would earn investing instead.
- 4Set how long you plan to stay — this changes the answer more than anything else.
Frequently Asked Questions
What makes buying worth it?
Time. The upfront 8% or so in stamp duty, registration and interiors is dead money that takes years of appreciation to recover. Buying usually wins if you stay seven years or more, and usually loses below five.
Why does the rent case invest the down payment?
Because that is the honest comparison. If you rent, the down payment and the monthly difference between EMI and rent do not vanish — they can be invested. Comparing an owner's net worth against a renter who saves nothing overstates the case for buying.
What is the rent-to-price ratio rule?
Divide the annual rent by the property price. In most Indian metros this sits at 2 to 3%, well below home loan rates of 8.5%, which mathematically favours renting and investing the difference. It flips when property appreciation is strong.
Does this include home loan tax benefits?
No. Under the old regime you can claim up to ₹2 lakh of interest under Section 24(b) and principal under 80C, which improves the buying case. Under the new regime, which most salaried taxpayers now use, there is no such benefit on a self-occupied home.
What about the non-financial side?
The calculator only handles money. Security of tenure, freedom to renovate, and not dealing with landlords are real benefits; so are the flexibility to relocate for work and not being tied to one illiquid asset. Weigh those separately.