Rent vs Buy Calculator
Buying is not automatically better than renting. This calculator compares two paths with the same money: buy a home, or rent and invest what you would have spent, and shows which leaves you wealthier.
Results
Result
Renting comes out ahead
- Difference in net worth
- ₹65,82,200
- Net worth if you buy
- ₹1,35,91,678
- Net worth if you rent and invest
- ₹2,01,73,879
- Monthly EMI
- ₹55,541
- Total rent paid
- ₹64,73,569
- Total EMI and upkeep paid
- ₹1,17,62,821
- Buying pulls ahead from
- Not within this period
After 15 years, renting comes out ahead: your net worth would be ₹1,35,91,678 if you buy and ₹2,01,73,879 if you rent and invest the difference (a gap of ₹65,82,200).
Net worth over time
- If you buy
- If you rent
Net worth by year (15 rows)
| Period | If you buy | If you rent | Property value |
|---|---|---|---|
| Year 1 | ₹19,59,375 | ₹28,29,860 | ₹84,00,000 |
| Year 2 | ₹25,09,608 | ₹35,51,186 | ₹88,20,000 |
| Year 3 | ₹30,92,675 | ₹43,28,236 | ₹92,61,000 |
| Year 4 | ₹37,10,689 | ₹51,65,641 | ₹97,24,050 |
| Year 5 | ₹43,65,908 | ₹60,68,436 | ₹1,02,10,253 |
| Year 6 | ₹50,60,750 | ₹70,42,097 | ₹1,07,20,765 |
| Year 7 | ₹57,97,802 | ₹80,92,579 | ₹1,12,56,803 |
| Year 8 | ₹65,79,836 | ₹92,26,364 | ₹1,18,19,644 |
| Year 9 | ₹74,09,818 | ₹1,04,50,504 | ₹1,24,10,626 |
| Year 10 | ₹82,90,929 | ₹1,17,72,676 | ₹1,30,31,157 |
| Year 11 | ₹92,26,576 | ₹1,32,01,234 | ₹1,36,82,715 |
| Year 12 | ₹1,02,20,412 | ₹1,47,45,276 | ₹1,43,66,851 |
| Year 13 | ₹1,12,76,355 | ₹1,64,14,711 | ₹1,50,85,193 |
| Year 14 | ₹1,23,98,607 | ₹1,82,20,327 | ₹1,58,39,453 |
| Year 15 | ₹1,35,91,678 | ₹2,01,73,879 | ₹1,66,31,425 |
Show the calculation steps
- Buying: down payment ₹16,00,000 + costs ₹5,60,000; loan ₹64,00,000 with an EMI of ₹55,541; upkeep 1% of the property value a year.
- Renting: rent starts at ₹25,000 a month and rises 5% a year. The renter invests the upfront cost at 9%, plus any month when renting is cheaper than owning.
- The property grows 5% a year; the buyer's net worth = property value − selling costs − loan balance + any savings invested.
- After 15 years: buyer ₹1,35,91,678 versus renter ₹2,01,73,879.
- A simplified model with constant growth rates. It ignores tax benefits, changes in interest rates and the non-financial value of owning. Test different appreciation and return assumptions.
How the comparison is fair
Both people spend the same each month. The buyer pays EMI and upkeep. The renter pays rent and invests the upfront cost of buying and any month's difference. After your chosen number of years, each person's net worth is compared.
What tips the balance
Buying tends to win when prices rise faster than the cost of borrowing, when you stay a long time and when rent is high compared with the price. Renting tends to win when prices are high compared with rent, growth is low, or you may move soon.
Formula
Buyer's net worth = Property value × (1 − selling costs) − loan balance + savings invested
Renter's net worth = Upfront cash + monthly savings versus buying, invested at your return
Where:
- Upfront cash
- = Down payment plus buying costs
- Monthly savings
- = The month's cost of owning minus rent, if owning costs more
Example calculation
₹80 lakh home vs ₹25,000 rent over 15 years
Inputs
- Home Price
- ₹80,00,000
- Down Payment
- 20 %
- Buying Costs
- 7 % of price
- Loan Interest Rate
- 8.5 %
- Loan Tenure
- 20 years
- Property Price Growth
- 5 % a year
- Upkeep and Property Tax
- 1 % of value a year
- Monthly Rent for a Similar Home
- ₹25,000
- Rent Increase
- 5 % a year
- Return if You Invest Instead
- 9 %
- Selling Costs
- 2 % of price
- Compare Over
- 15 years
Result
- Result
- Renting comes out ahead
- Difference in net worth
- ₹65,82,200
- Net worth if you buy
- ₹1,35,91,678
- Net worth if you rent and invest
- ₹2,01,73,879
- Monthly EMI
- ₹55,541
- Total rent paid
- ₹64,73,569
- Total EMI and upkeep paid
- ₹1,17,62,821
- Buying pulls ahead from
- Not within this period
Step-by-step
- Buying: down payment ₹16,00,000 + costs ₹5,60,000; loan ₹64,00,000 with an EMI of ₹55,541; upkeep 1% of the property value a year.
- Renting: rent starts at ₹25,000 a month and rises 5% a year. The renter invests the upfront cost at 9%, plus any month when renting is cheaper than owning.
- The property grows 5% a year; the buyer's net worth = property value − selling costs − loan balance + any savings invested.
- After 15 years: buyer ₹1,35,91,678 versus renter ₹2,01,73,879.
Important notes
- The model ignores tax benefits, changing interest rates and the non-financial value of owning a home. Try several growth and return assumptions.
Disclaimer: This calculator provides estimates for informational purposes and should not be considered financial advice. Actual figures from lenders, banks and investment products can differ because of fees, taxes, rounding rules and changing rates. Consult a qualified professional before making financial decisions.
Frequently asked questions
Is it better to rent or buy?
It depends on price growth, rent, interest rates, your investment return and how long you stay. Use your own numbers in the calculator.
Why does the renter invest the down payment?
Because the money spent on buying could otherwise be invested. Ignoring it would bias the comparison towards buying.
What is the break-even point?
The year from which buying stays ahead of renting.
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- Rental Yield CalculatorCalculate the gross and net rental yield of a property after vacancy and yearly expenses.
- Property ROI CalculatorCalculate the total profit, ROI and annualised return of a property from purchase costs, rent and sale price.
- Down Payment CalculatorFind the down payment on a home, the loan and EMI that remain, and the monthly saving needed to reach the down payment.
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