Rent vs Buy Calculator
'Rent is throwing money away' is the most expensive myth in Indian personal finance. The honest comparison: buying builds equity in an appreciating asset; renting + investing the difference builds a liquid portfolio. Both can win — it depends on the numbers.
This calculator runs both scenarios side by side for N years. The renter invests the down payment plus (EMI − rent) every month. The buyer gets the home's appreciation minus the remaining loan. The verdict is pure arithmetic — no myths.
Four steps, thirty seconds.
Enter the home and loan details. Price, down payment %, loan rate and tenure — your buying scenario.
Enter rent and growth assumptions. Current rent, its yearly hike, property appreciation, and what your investments would earn.
Choose the comparison period. How long you'd actually stay — 10 years is a realistic default.
Read the verdict, then stress-test. Drop the investment return by 2% or raise appreciation by 2% — small changes flip many verdicts, which is itself the lesson.
Buy: net wealth = home value − remaining loan balance, with home value = price × (1 + appreciation)N. Rent: portfolio = down payment compounded + Σ(EMI − rentmonth) invested monthly at the alternative return.
Worked example: with the defaults above, buying builds ≈ ₹1.31 crore of home equity in 10 years, while renting + investing builds ≈ ₹1.63 crore — renting wins by ~₹32 lakh, because 12% market returns beat 6% property appreciation here.
Standard future-value and amortization mathematics; framework follows the classic rent-vs-buy academic model (Poterba-style user-cost logic, simplified).
Sometimes — when investment returns comfortably exceed property appreciation and rent hikes stay moderate. In the worked example above, 12% vs 6% decides it. Flip those numbers and buying wins. That's why you run your numbers.
Registration, stamp duty, brokerage, maintenance and property tax (all favour renting), plus the forced-savings discipline of EMIs and home-loan tax benefits (favour buying). Treat the verdict as directional, not gospel.
Under the old regime, principal (80C) and interest (Section 24, up to ₹2 lakh) deductions can tilt close calls toward buying. Factor them separately if you use the old regime.
Short stays punish buying — transaction costs are spread over fewer years and the loan is still mostly interest. Renting usually wins under ~5–7 years.
Absolutely — stability, ownership pride and freedom from landlords are real value. This calculator prices the financial half; add your own premium for the emotional half.
Disclaimer: Educational illustration only — not financial advice. Ignores transaction costs, maintenance, taxes and loan tax benefits; verdict is directional.