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Rent vs Buy Calculator

The rent-versus-buy question is arithmetic over a specific number of years in a specific home, not a matter of principle. The buyer converts a down payment and EMIs into an appreciating asset that still carries a loan; the renter converts the same cash flow into investments while rents rise around them. Neither wins by default: short stays favour renting, long ones buying, and the rate-versus-return gap decides ties.

Enter values

Rent for the home you would otherwise buy

Typical renewal hikes run 3–8% a year

Flat or house you are considering buying

Lenders typically ask for 10–25% of the price

Annual reducing rate your bank offers

The EMI keeps running even if you sell sooner

Compare both sides after this many years

Annual appreciation of the property

What the renter earns on investments

Results update as you type.

Results

Verdict
Buying ahead by ₹4,11,034.84 after 10 years
Buyer equity (house value − loan left)
₹85,51,552.36
Renter corpus (down payment + savings invested)
₹81,40,517.51
021.4L42.8L64.1L85.5LY1Y3Y5Y7Y9
  • Buyer equity
  • Renter corpus

How is the Rent vs Buy calculated?

Enter the rent you would pay and its typical annual hike, the property price, down payment percentage, loan rate and tenure, your actual stay, appreciation, and the renter's return. The calculator simulates month by month: EMIs amortise the loan while house value grows, and the renter's corpus compounds the down payment plus every monthly outflow-minus-rent difference at the investment return. At the end of the stay, buyer equity meets renter corpus and the verdict names the winner.

Formula

buyer equity(m) = price × (1 + growth)^(m ÷ 12) − loan balance(m)
renter corpus(m) = down × (1 + r)^m + Σ (outflow(k) − rent(k)) × (1 + r)^(m − k)

where m = month and r = investment return ÷ 12; rent rises yearly with the hike, outflow = EMI until the loan clears, then 0. A negative difference borrows at the same rate — a simplification.

Example

Rent: ₹25,000 (5% hikes) · Flat: ₹80,00,000 · Down payment: 20% (₹16,00,000) · Loan: ₹64,00,000 at 8.5% for 20 years, EMI ₹55,540.69 · Stay: 10 years · Growth: 5% · Returns: 8%
After 120 months the loan has shrunk to about ₹44,79,605, leaving buyer equity of ₹85,51,552.
The renter invests the ₹16,00,000 plus each month's EMI-minus-rent difference at 8%, finishing at ₹81,40,518.
Verdict: buying ahead by ₹4,11,035 after 10 years — a margin of barely 5%, which the excluded costs below could erase.

Things to remember

This model excludes maintenance, property tax, home-loan tax benefits under Sections 24(b) and 80C, and rental brokerage — each can move the verdict by lakhs. A margin under 10% is a tie broken by life: a job change in year three turns a winning purchase into a forced sale. Re-run with your real rates before signing.

Frequently Asked Questions

Is it better to rent or buy in India right now?

There is no timeless answer — it depends on your stay length, loan rate, appreciation and rent hike. The honest method is to simulate your own numbers: the defaults here have buying ahead by about ₹4.1 lakh after ten years, a gap narrow enough that one relocation or a bad year of appreciation flips it.

How long should I live in a house for buying to make sense?

As a rule of thumb, buying usually needs seven to ten years to beat renting, because registration costs and the loan's early interest-heavy EMIs are recovered slowly. Below five years, the cost of entering and exiting rarely pays back — which is exactly what the stay-years input is designed to test.

Why does rent-vs-buy almost always come out close?

Because the same monthly cash flow buys two different things: the buyer's EMI is part investment and part interest cost, while the renter's difference is fully invested. Move appreciation, rent hike or return by a point each and the verdict shifts — hence a simulation for your numbers, not a headline.

What does this calculator deliberately leave out?

Maintenance and society charges, property tax, tax deductions on home-loan interest and principal, and brokerage on renting are all excluded to keep the two sides comparable. Adding them usually tilts further toward renting in the early years, so treat the printed verdict as the buyer's best case.

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