Rent vs Buy Calculator

Rent vs buy calculator: rent and invest, or buy with a home loan?

This rent vs buy calculator puts the two choices side by side over the number of years you expect to stay. On the buying side it takes the price, down payment, stamp duty and other buying costs, the home loan EMI, maintenance and property tax, how fast the property appreciates and what selling costs. On the renting side it takes today’s rent, how fast it rises, and the return you would earn by investing the down payment and the monthly difference instead.

The year-by-year table shows the owner’s equity if the home were sold each year against the renter’s investment portfolio, and the verdict names the winner and the break-even year — the first year in which buying pulls ahead. It is built for Indian buyers (₹, EMIs, stamp duty) but works for any currency. Everything runs in your browser; the result is an estimate, not financial advice.

How to use the Rent vs Buy Calculator

1. Enter the Property price, the Down payment as a percentage, and Buying costs — use the stamp duty calculator for your state.
2. Type the Loan interest rate and Loan tenure; the EMI is worked out for you.
3. Set Property appreciation, Maintenance + property tax as a share of value, and Selling costs.
4. Enter the Monthly rent for a comparable home, its yearly growth and the Investment return you expect on money you do not spend on buying.
5. Choose how many years to Compare over, read the verdict and break-even year, and download the table as CSV.

Rent vs Buy Calculator features

How the rent vs buy comparison works

Both paths are simulated month by month. The buyer pays the down payment and buying costs on day one, then the EMI plus a twelfth of the annual maintenance and tax. The renter pays rent, which rises by the growth rate every year. The renter’s portfolio begins with the same cash the buyer handed over and then grows at the investment return, receiving the monthly difference between the owner’s outlay and rent (a negative difference withdraws from it). At the end of each year the owner’s equity is the home’s value less selling costs and the outstanding loan; the renter’s wealth is the portfolio. “Buying ahead by” is the difference.

This is the standard “rent and invest the difference” method used in most buy-or-rent analyses. It deliberately ignores taxes: rental income, long-term capital gains on the home or the investments, and the home-loan deductions under the old tax regime — the home loan calculator covers those. It also ignores the security deposit, the hassle of moving and the value of owning your home, which only you can price.

Worked example: ₹75 lakh flat or ₹25,000 rent

With the default inputs — ₹75 lakh price, 20% down, 7% buying costs, a ₹60 lakh loan at 8.5% for 20 years (EMI about ₹52,069), 5% appreciation, 1% maintenance and tax, 2% selling costs, ₹25,000 rent growing 5% a year and 10% investment returns — the renter starts with ₹20.25 lakh invested and adds roughly ₹33,000 a month, the gap between the owner’s outlay and rent. Over ten years that portfolio grows faster than the owner’s equity, so renting comes out ahead by about ₹37 lakh. Raise appreciation to 9% and buying overtakes renting in year 4; at 8% appreciation with 8% returns it does so in year 5.

The lesson is the sensitivity: the verdict turns on the gap between appreciation and investment return, on the rent-to-price ratio (₹25,000 a month on ₹75 lakh is 4% a year, typical for Indian metros), and on how long you stay. Short stays rarely favour buying because stamp duty, brokerage and selling costs — often 9–10% of the price together — must be recovered first.

Reading the result

• Break-even year is the first year in which buying is ahead. If you expect to sell before it, renting is the cheaper choice on these assumptions.
• Owner’s equity is what you would walk away with after selling and repaying the loan — not the home’s value.
• Rent-to-price ratio: when annual rent is below about 3% of the price, renting usually wins unless appreciation is strong; above 5–6% buying tends to win sooner.
• Try several scenarios: a 1% change in appreciation or returns moves the answer more than most other inputs. Test the EMI’s fit with your pay in the EMI calculator and compare the renter’s path with the SIP calculator.