Rent vs buy calculator
Should I buy this house or keep renting and invest the difference?
The renter invests this instead — it is the head start either side gets.
A year. Most Indian landlords revise 5–10% at renewal.
This and the line below decide the whole answer. Be honest about both.
What the renter earns on the down payment and every rupee of the EMI they did not pay.
A year, as a share of what the place is worth — society dues, repairs, property tax.
₹2,45,33,953ahead by renting, after 20 years
- Monthly EMI
- ₹69,426
- Net worth if you buy
- ₹3,20,71,355
- Net worth if you rent
- ₹5,66,05,308
Buying never overtakes renting inside 20 years at these numbers — 12% on investments beats 6% on the flat. Stamp duty, registration and brokerage are not modelled; on a ₹1 Cr flat that is roughly ₹7 L the buyer never sees again. Tax on capital gains, on either side, is not modelled either.
- Buying
- Renting
| Year | Worth — buying | Worth — renting | Paid to own | Paid to rent |
|---|---|---|---|---|
| 1 | ₹27,59,220 | ₹28,65,699 | ₹29,39,112 | ₹3,60,000 |
| 2 | ₹35,68,514 | ₹38,21,279 | ₹38,84,584 | ₹7,45,200 |
| 3 | ₹44,31,285 | ₹48,76,679 | ₹48,36,798 | ₹11,57,364 |
| 4 | ₹53,51,178 | ₹60,42,993 | ₹57,96,158 | ₹15,98,376 |
| 5 | ₹63,32,092 | ₹73,32,598 | ₹67,63,093 | ₹20,70,264 |
| 6 | ₹73,78,204 | ₹87,59,329 | ₹77,38,057 | ₹25,75,188 |
| 7 | ₹84,93,987 | ₹1,03,38,650 | ₹87,21,532 | ₹31,15,452 |
| 8 | ₹96,84,232 | ₹1,20,87,828 | ₹97,14,029 | ₹36,93,540 |
| 9 | ₹1,09,54,069 | ₹1,40,26,187 | ₹1,07,16,089 | ₹43,12,092 |
| 10 | ₹1,23,08,998 | ₹1,61,75,334 | ₹1,17,28,286 | ₹49,73,940 |
| 11 | ₹1,37,54,911 | ₹1,85,59,435 | ₹1,27,51,228 | ₹56,82,120 |
| 12 | ₹1,52,98,123 | ₹2,12,05,547 | ₹1,37,85,560 | ₹64,39,872 |
| 13 | ₹1,69,45,405 | ₹2,41,43,955 | ₹1,48,31,965 | ₹72,50,664 |
| 14 | ₹1,87,04,014 | ₹2,74,08,562 | ₹1,58,91,167 | ₹81,18,216 |
| 15 | ₹2,05,81,735 | ₹3,10,37,356 | ₹1,69,63,935 | ₹90,46,500 |
| 16 | ₹2,25,86,916 | ₹3,50,72,892 | ₹1,80,51,082 | ₹1,00,39,764 |
| 17 | ₹2,47,28,512 | ₹3,95,62,862 | ₹1,91,53,471 | ₹1,11,02,556 |
| 18 | ₹2,70,16,133 | ₹4,45,80,423 | ₹2,02,72,017 | ₹1,22,39,748 |
| 19 | ₹2,94,60,087 | ₹5,02,34,336 | ₹2,14,07,689 | ₹1,34,56,548 |
| 20 | ₹3,20,71,355 | ₹5,66,05,308 | ₹2,25,61,515 | ₹1,47,58,524 |
Renting looks like money burnt and a home loan looks like forced saving, which is why the argument at the dinner table never ends. This puts both sides on the same footing: the buyer ends up owning a flat with a shrinking loan against it, and the renter ends up owning a portfolio built from the down payment they never spent plus every rupee the EMI and the upkeep ran above their rent. It compares the two net worths, year by year, and tells you the year — if there is one — when owning finally pulls ahead. The answer is not a universal truth about property; it turns almost entirely on two numbers you supply, what the flat appreciates at and what your investments return.
A worked example
A ₹80,00,000 flat in a metro suburb, against the ₹22,000 you pay for a similar one down the road. Ten inputs, set above exactly as follows: property price ₹80,00,000, down payment 20%, loan rate 8.5%, tenure 20 years, rent today ₹22,000, rent rising 7% a year, the flat appreciating 6%, investments returning 12%, upkeep 1% of the flat’s value a year, compared over 20 years. The page returns:
- ₹55,541 a month in EMI, against ₹22,000 of rent — a gap of ₹33,541 before upkeep
- ₹2,56,57,084 net worth after twenty years if you buy — the flat, loan fully repaid
- ₹4,82,30,142 net worth after twenty years if you rent and invest
- renting ahead by ₹2,25,73,058, and buying never overtakes inside the twenty years
The buyer pays ₹72 L more over the period and still ends up ₹2.26 Cr behind — because the money went into an asset compounding at 6% instead of one compounding at 12%.
Nothing in that result is about property being a bad asset. It is arithmetic on the two rates you typed: 6% against 12%. The flat is also a leveraged position — the buyer put down ₹16,00,000 and controls ₹80,00,000 of it — which is why buying is not as far behind as the raw rate gap suggests, and why it wins outright once appreciation gets close to the portfolio’s return.
The two sliders that decide it
Same flat, same loan, same rent, same 12% portfolio. Only the appreciation rate moves.
| Flat grows 6% a year | Flat grows 9% a year | Flat grows 11% a year | |
|---|---|---|---|
| Worth in 20 years — buying | ₹2.57 Cr | ₹4.48 Cr | ₹6.45 Cr |
| Worth in 20 years — renting | ₹4.82 Cr | ₹5.11 Cr | ₹5.37 Cr |
| Ahead at year 20 | Renting, by ₹2.26 Cr | Renting, by ₹62.9 L | Buying, by ₹1.08 Cr |
A filled disc means buying wins. Renting's column drifts up too, because upkeep is 1% of a rising property value — the pricier the flat gets, the bigger the monthly surplus the renter invests.
Somewhere between 9% and 11% appreciation, on these inputs, the two sides cross. That number — not an opinion about real estate — is the question to take away: over the next twenty years, will this specific locality beat roughly 10% a year, every year, after upkeep? Run it the other way too. Hold appreciation at 9% and drop the portfolio from 12% to 10%, and buying wins by ₹77,78,704, because the renter’s advantage was never the flat’s weakness, it was the equity market’s strength.
What this result does not account for
The day-one costs of buying
Stamp duty (a state levy, so the rate depends on the state and sometimes on the buyer being a woman), registration, brokerage and society transfer charges are all excluded. They are paid up front, never recovered, and they push the buying line down from the very first year.
Tax, on both sides
No relief and no liability is modelled. Section 24(b) interest and 80C principal for the buyer, section 10(13A) HRA for the renter — all old-regime only. And at the end, the flat sold attracts long-term capital gains under section 112, while the portfolio attracts them under section 112A. The net worths here are pre-tax.
The renter has to actually invest
The renting column assumes the down payment and every month of positive EMI-minus-rent surplus go into the market and stay there for the whole period. It also drops the surplus once rent overtakes the EMI rather than drawing the portfolio down, so late years are modelled generously for the renter.
An under-construction flat
This assumes you move in and stop paying rent immediately. Buy off-plan and you pay rent and pre-EMI interest together for years, and an under-construction sale attracts GST where a completed, ready flat does not. Neither is in the model.
Four more that are specific enough to matter. The loan rate is frozen — a floating-rate loan resets against the RBI’s external benchmark, so twenty years at exactly 8.5% will not happen; run the rate you fear as well as the rate you were quoted. The flat is assumed sellable at the modelled value, which is the assumption the buying column leans on hardest: a portfolio can be liquidated in three days and a flat cannot, and the price a registered sale actually fetches is not the price the builder’s next launch is quoted at. Upkeep is a flat percentage of the flat’s value, which smooths over the lumpy reality of a ₹6 lakh lift replacement in year fourteen. And rent is assumed continuous — no vacancy, no shifting costs, no deposit locked up, and no landlord asking you to leave in month seven.
One quirk of the break-even figure is worth naming, because it can mislead. It reports the first year buying is ahead, not a permanent crossing. Take the worked example and move appreciation alone to 9%: the badge says year one, and it is not lying — buying leads every year through year twelve. Then the renter’s portfolio, compounding at 12% on a base that has grown for a decade, overtakes it in year thirteen and finishes ₹62,88,268 ahead. Read the year-by-year table, not just the badge.
Where to go next
The buying side of this page starts from a price and a down payment; the home loan EMI calculator breaks that same loan down into what you pay in interest versus principal, year by year. Before you trust the buying column, put your state’s rate into the stamp duty calculator and take that number off the buying side by hand — it is the single largest thing this model leaves out. And if you are staying put for now, the HRA exemption calculator shows what the renting side is worth to you after tax, which this page deliberately does not model.
Is it cheaper to rent or buy a house in India?
Neither, universally — it depends on the gap between what the flat appreciates at and what you would otherwise earn on the money. In the worked example on this page, a ₹80 lakh flat growing 6% a year loses to a renter earning 12%, by ₹2.26 crore over twenty years. Push the flat's appreciation to 11% against the same 12% portfolio and buying wins by ₹1.08 crore. The honest use of this page is to find the appreciation rate at which the two sides draw level, then ask yourself whether the locality you are buying in will really beat it for two decades.
Does this include stamp duty, registration and brokerage?
No, and the page says so under the result. Stamp duty is levied by the state, not the Centre, so the rate depends on where the flat is and often on whether the buyer is a woman; registration is charged on top, and a broker's fee on top of that. All of it is paid on day one and none of it is recoverable, so it makes buying worse than this model shows. Look your state's rate up in the stamp duty calculator and subtract the figure from the buying side yourself.
Should I count the home loan tax benefit?
Only if you will actually claim it. Interest on a loan for a self-occupied house is deductible under section 24(b) up to ₹2 lakh a year, and principal repayment counts towards the ₹1.5 lakh ceiling of section 80C — but both belong to the old regime. If you file under the new regime of section 115BAC, the self-occupied interest deduction is not available to you, and neither is 80C. A renter's equivalent break, the HRA exemption under section 10(13A), is also an old-regime benefit. This calculator models no tax relief on either side, so it is neutral rather than wrong — but if you are an old-regime filer, the buying side is cheaper in real life than it looks here.
How many years do I have to stay for buying to be worth it?
Watch the "buying pulls ahead in year" figure, and be careful with it: it reports the first year the owner's net worth exceeds the renter's, not a permanent crossing. Move the worked example's appreciation alone to 9% and the figure reads year one — buying does lead, every year to year twelve, then falls behind in year thirteen and ends year twenty ₹62.9 lakh short. What matters is whether buying is ahead at the horizon you will actually hold the flat for. Set "compare over" to the number of years you honestly expect to stay put, not to the loan tenure — a flat sold in year six carries the whole stamp duty and brokerage bill and barely any principal repaid.
What if I do not invest the difference?
Then the renting column on this page is fiction, and buying wins by default. The renter's entire case is that the down payment and the monthly gap between rent and EMI are invested and left alone for twenty years. If that money is spent, the model is comparing a disciplined investor against you. A home loan's real advantage is that it is compulsory: nobody skips an EMI the way they skip a SIP.
This page starts from typical figures. In Hundo the same calculator opens on your own — the loan, the deposit, the salary already on the ledger — and says where each number came from.