Built for Indian home loans, rents and taxes
Rent vs Buy Calculator: Should You Buy a Home or Rent?
Compare buying a house with renting and investing the difference, month by month. This rent vs buy calculator includes your EMI, stamp duty, maintenance, rent increases, home loan tax benefits and investment returns, and shows the year buying starts to pay off.
- Net worth, not just EMI vs rent
- Break-even year
- Home loan tax benefit
- Break-even appreciation
Year-by-year comparison
Net worth if you sold that year| Year | Home value | Loan left | Buy net worth | Rent that year | Renter’s investments | Rent net worth |
|---|
- 2–3.5%Typical rental yield in big Indian cities
- 8–9.5%Typical home loan interest rate
- 5–8%Stamp duty and registration in most states
- ₹2 lakhYearly interest deduction, old tax regime
A fair comparison
Why this rent vs buy calculator is more honest
Comparing EMI with rent is the most common mistake. The real question is which choice leaves you with more wealth after the years you plan to stay.
Money compared like for like
The renter invests the down payment and buying costs, and whichever option is cheaper each month invests the difference.
Break-even year
See the first year in which buying beats renting, if it ever does, based on your own numbers.
Break-even price growth
Find out how fast home prices must rise for buying to match renting, so you can judge how realistic that is.
Indian costs and taxes
Stamp duty, maintenance, security deposits and old-regime deductions on home loan interest and principal are all included.
Clear net worth chart
Two lines show how your wealth grows each year under both choices, and where they cross.
Month-by-month model
The loan is paid down monthly and rent rises every year, for a precise year-by-year table you can check.
Takes two minutes
How to use the rent vs buy calculator
Five steps to a clear answer.
Enter the home you would buy
Add its price, your down payment, the loan rate and tenure, and one-time costs like stamp duty.
Enter the rent for a similar home
Use the rent for a comparable home in the same area, plus the usual yearly increase and deposit.
Set growth rates
Choose how fast you expect home prices to rise and what return you could earn by investing instead.
Choose how long you will stay
Buying has high entry and exit costs, so the time you stay changes the answer the most.
Read the verdict
See which choice leaves you wealthier, the break-even year, and the price growth needed for buying to win.
The thinking
How to decide between renting and buying
A home is both a place to live and an investment. Buying locks your down payment and stamp duty into the house, and your EMI goes mostly to interest in the early years. Renting keeps that money free to invest, but your rent rises every year and you build no property.
This calculator gives each choice the same money. The renter invests what the buyer spent upfront. Each month, whichever option costs less invests the difference. After the years you choose, it compares what each person would have if the home were sold and the investments cashed in.
What the price-to-rent ratio tells you
Divide the home price by one year of rent. In many Indian cities the ratio is 30 or more, which means rent is cheap compared with prices, so renting and investing often wins over short periods. When the ratio is lower, buying tends to pay off sooner.
When buying makes more sense
Buying usually wins when you plan to stay a long time, prices are rising faster than rents, rents are high for your area, or you would not actually invest the money you save by renting. Check your loan eligibility with our home loan eligibility calculator.
Buying makes sense if
- You plan to stay 10 years or more
- You can afford the down payment without draining savings
- The EMI is comfortable, ideally under 40% of take-home pay
- You value stability and the freedom to renovate
Renting makes sense if
- You may move city or job within a few years
- The price-to-rent ratio in your area is very high
- You will invest the difference every month, without fail
- You want flexibility and lower upfront costs
Answers
Rent vs buy calculator FAQs
Is it better to rent or buy a house in India?
It depends on how long you will stay, the price-to-rent ratio in your area, your loan rate, how fast prices rise and whether you invest the money you save by renting. In many big cities rent is only 2 to 3.5% of the home price a year, so renting and investing often wins over shorter periods, while buying tends to win the longer you stay.
How does this rent vs buy calculator work?
It follows both choices month by month. The buyer pays the down payment, stamp duty, EMI and maintenance. The renter pays rent and invests the money the buyer spent upfront. Each month, whichever option costs less invests the difference. At the end it compares home equity after selling costs with the renter’s investments.
What is a good price-to-rent ratio?
Divide the home price by one year of rent. A ratio under about 15 usually favours buying, 15 to 20 is borderline, and above 20 usually favours renting. Many Indian metros are above 25, which is why renting often looks cheaper.
What is the break-even year?
It is the first year in which your net worth from buying is higher than from renting and investing. Before that, the high upfront costs of buying outweigh its benefits.
What home price growth should I assume?
Residential prices in India have grown by roughly 5 to 7% a year on average over long periods, but this varies widely by city and locality. Try a few rates, and check the break-even price growth to see what buying needs to win.
Are home loan tax benefits included?
Yes, if you choose the old tax regime. It adds the tax saved on up to ₹2 lakh of interest a year and up to ₹1.5 lakh of principal under Section 80C, at your slab rate plus cess. The new regime does not give these deductions for a self-occupied home.
Why compare net worth instead of EMI and rent?
Part of each EMI repays the loan and builds your equity, while rent is gone for good. But buying also ties up a large down payment that could earn returns. Comparing net worth after the same period captures all of this fairly.
Does the calculator include the security deposit?
Yes. The renter’s security deposit is held back from their investments and counted in their net worth, because it is returned when they move out.
What if I would not invest the money I save by renting?
Then renting will look much worse than this calculator shows. The rent-and-invest result assumes you invest the difference every month. If you would spend it instead, buying is often the better way to build wealth.
Make the biggest money decision with real numbers
Use the rent vs buy calculator with the actual home and rent you are considering, then test a few different growth rates before you decide.
Compare rent vs buyThis calculator gives estimates for general information and is not financial advice. Property prices, rents and returns can differ a lot from the rates you enter.