Real Estate
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Rent vs Buy Calculator
Compare the long-term cost of renting against buying a home. Adjust any input below and your results update instantly.
Understanding rent vs buy
The concept, the motivation, and what to watch out for.
What actually decides rent vs buy?
Buying builds equity in an appreciating asset, but ties up a large down payment and locks in ongoing ownership costs. Renting avoids all of that, but the money not spent on a down payment only helps you if it's actually invested.
This calculator compares both paths as "net worth" at the end of your time horizon — a buyer's home equity against a renter's invested down payment plus whatever monthly surplus they'd have compared to a buyer's EMI and ownership costs.
The down payment's opportunity cost is easy to miss
A large down payment invested instead of spent can compound into a substantial sum — often the single biggest factor in this comparison.
The gap between two growth rates decides the outcome
Whether buying or renting wins usually comes down to how home appreciation compares to the return you'd actually earn by investing instead.
How this calculator helps
Enter your numbers for both paths — your projected net worth under buying and under renting-and-investing update instantly, side by side.
Compare renting and buying
Fill in the starred fields on the left — your results update instantly on the right.
Your details
≈ ₹80.00 L
e.g. ₹80,00,000 for a city apartment
e.g. 20% down payment
e.g. 8.5% for a home loan
e.g. ₹25,000 monthly rent
e.g. 10 years
e.g. 6% per year
e.g. 11% for equity mutual funds
How these compare
vs. typical India long-term ranges
Home appreciation: 6%
Typical Indian home appreciation: 4–8%/year
Investment return: 11%
India long-term equity avg: 10–13%
These are example numbers. Edit any input on the left to see your own.
Renting & investing builds more net worth by
₹23.34 L
over 10 years
Buying: net worth
₹1.43 Cr
Renting: net worth
₹1.67 Cr
Renting and investing comes out ahead by ₹23.34 L over 10 years, at these numbers.
Net worth over time: buying vs. renting
Buying (home equity)Renting + investing
Year-by-year comparison
Shows which option is ahead each year, and by how much the trailing option compares.
YearBuying: net worthRenting: net worthStatus
1₹25.04 L₹25.55 L
Renting ahead
Buying at 98% of the other
2₹34.75 L₹36.02 L
Renting ahead
Buying at 96% of the other
3₹45.17 L₹47.51 L
Renting ahead
Buying at 95% of the other
4₹56.36 L₹60.10 L
Renting ahead
Buying at 94% of the other
5₹68.38 L₹73.93 L
Renting ahead
Buying at 92% of the other
6₹81.29 L₹89.12 L
Renting ahead
Buying at 91% of the other
7₹95.15 L₹1.06 Cr
Renting ahead
Buying at 90% of the other
8₹1.10 Cr₹1.24 Cr
Renting ahead
Buying at 89% of the other
9₹1.26 Cr₹1.44 Cr
Renting ahead
Buying at 87% of the other
10₹1.43 Cr₹1.67 Cr
Renting ahead
Buying at 86% of the other
Compare scenarios
See how investment returns or home appreciation would shift the outcome.
Your plan
6% appr · 11% returns
-₹23.34 L
Net worth gap (buy − rent)
Baseline
Returns 13%
6% appr · 13% returns
-₹49.31 L
Net worth gap (buy − rent)
-₹25.97 L
Appreciation 8%
8% appr · 11% returns
₹11.59 L
Net worth gap (buy − rent)
+₹34.93 L
Worked example, using your numbers
A step-by-step walkthrough of how each path builds net worth.
Step 1 · Down payment invested
If renting, investing your ₹16.00 L down payment instead grows to
₹45.43 L
Step 2 · Buyer's home equity
After 10 years, with your loan paid off, your home is worth
₹1.43 Cr
Step 3 · Final comparison
Renting and investing the difference instead grows to
₹1.67 Cr
✓
Renting and investing comes out ahead by ₹23.34 L over 10 years — ₹1.43 Cr in home equity vs ₹1.67 Cr invested.
Personalised insights
What your numbers reveal, and what changing them would do.
Renting and investing builds ₹23.34 L more net worth over 10 years
Buying leaves you with ₹1.43 Cr in home equity, while renting and investing the difference grows to ₹1.67 Cr.
Your ₹16.00 L down payment alone, invested, grows to ₹45.43 L
That's before counting any monthly savings a renter invests on top — the down payment's opportunity cost is often the single biggest factor in this comparison.
A 13% investment return would move the gap to -₹49.31 L
Even without anything else changing, a higher return renters could earn elsewhere shifts the comparison from -₹23.34 L toward renting.
A 8% appreciation rate would move the gap to ₹11.59 L
Faster home price growth — which also means faster rent growth in this model — shifts the comparison from -₹23.34 L toward buying.
How this is calculated
Every step of the math behind your result, shown in the open.
A buyer's net worth: home equity
V_t = home value at year t, L_t = remaining loan balance, NW_buy = buyer's net worth
A buyer's net worth is simply what their home is worth (V_t) minus whatever they still owe on it (L_t) — the rest has become equity.
Example: ₹16.00 L invested at 11% for 10 years → ₹45.43 L
A renter's invested corpus grows monthly
C_m = renter's corpus after month m, r_m = monthly investment return, EMI+O = buyer's EMI plus ownership costs, R_m = rent in month m
Each month, a renter's invested corpus grows at the investment return, plus whatever they didn't spend that month compared to a buyer's EMI and ownership costs — which can be negative if rent has grown past that amount.
Example: ₹86,018 buyer outflow − ₹25,000 rent → ₹61,018 invested in month 1
Home value — and rent — both grow every year
V_0 = starting home price, g = appreciation rate, t = years, V_t = value after t years
The home's value compounds annually at the appreciation rate (g) — this calculator assumes rent grows at the same rate, since both track the same underlying housing market.
Example: ₹80.00 L appreciating 6%/year for 10 years → ₹1.43 Cr
Assumptions
- Rent is assumed to grow at the same rate as home appreciation, since both track the same underlying housing market.
- Property tax and maintenance are assumed at 1% of the home's original price annually.
- Home loan tax benefits (Section 80C/24(b)) aren't included — they could improve buying's real numbers.
- Selling costs (brokerage, capital gains tax) if you sold the home aren't included.
- Figures are indicative and pre-tax — not financial advice.
Did you know?
A few facts behind the rent vs buy decision.
2-3%
Indian rental yields are famously low
Gross rental yields in most major Indian cities are commonly just 2–3% of a property's value — far below what the same money could often earn invested elsewhere.
Cost
The down payment's opportunity cost is easy to overlook
A down payment isn't just an upfront cost — it's money that stops earning a separate return the moment it's spent on a home.
80C
Home loan tax benefits aren't included here
Section 80C and 24(b) deductions can improve buying's real numbers under the old tax regime — factor them in separately when comparing your own situation.
Flex
Renting offers flexibility buying doesn't
Beyond the numbers, renting makes it easier to relocate for work or change your mind about where you live — a real, if unquantifiable, factor in the decision.
Frequently asked questions
Straight answers to the questions we hear most about rent vs buy.
How does this calculator decide whether renting or buying wins?
It compares final net worth: a buyer's home equity (value minus remaining loan) against a renter's invested corpus (their skipped down payment plus any monthly savings versus a buyer's EMI and costs, all invested and compounding).
Why does the down payment matter so much?
A renter never has to pay it, so it can be invested from day one. Over a long horizon at a healthy return, that upfront sum alone can compound into a very large share of a renter's final net worth.
Does this include home loan tax benefits?
No. Section 80C (principal) and Section 24(b) (interest) deductions under the old tax regime can meaningfully improve buying's real return — they aren't modeled here, so buying may do somewhat better in practice than shown.
Is Indian real estate appreciation really only 4–8% a year?
Long-run averages in most Indian markets tend to fall in this range, well below headline stories about specific properties or short booms — it's worth checking historical data for your specific city and locality rather than assuming a rate.
What if I don't stay for the full time horizon?
If you'd sell earlier, you'd also owe selling costs (brokerage, capital gains tax) that aren't modeled here — shorter horizons generally favor renting, since buying's upfront costs have less time to be offset by appreciation.
Is this financial advice?
No. This tool provides indicative estimates based on your assumptions. Consult a certified financial advisor before making a rent-or-buy decision.
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Learn more
Articles to go deeper on the ideas behind this calculator.
Fundamentals
The down payment's hidden opportunity cost
Why the money you don't spend on a home matters as much as the home itself.
5 min read
Taxation
Section 80C and 24(b): home loan tax benefits explained
How principal and interest deductions work under the old tax regime.
6 min read
Fundamentals
Realistic expectations for Indian real estate appreciation
What long-run data actually shows, city by city.
5 min read