🏠 Rent vs. Buy
Compare property appreciation, ownership costs, rent growth, and market compounding over your selected tenure.
Home Purchase Details
Stamp duty, registration, brokerage, legal, and loan processing costs.
Renting & Market Rates
If you Buy
Final Property Value
₹0
If you Rent
Final Portfolio Value
₹0
How this calculation works
• The Buying Path: We simulate your EMI, the stamp duty, registration, brokerage, legal, and processing costs represented by your upfront-cost input, and annual ownership costs until the home is debt-free. The buyer's final net worth is the appreciated market value of the property.
• The Renting Path: The renter invests the down payment and avoided upfront costs on day one. Each month, the difference between the buyer's total outflow (EMI + ownership costs) and the renter's rent is added to a growing SIP. The renter's final net worth is this portfolio.
• Inflation & Growth: Rent grows annually at your specified rate. Property appreciates at your appreciation rate. The investment portfolio compounds at your expected market return.
• The Verdict: We compare the final liquid portfolio (Renter) against the market value of the property (Buyer) at the end of your tenure.
Worked example
Setup: Property value ₹1 Cr · Down payment ₹20 L · Home loan 8.5% · 20-year tenure · Upfront costs 7% · Ownership cost 1%/yr · Rent ₹25,000/mo · Rent growth 8%/yr · Property appreciation 6%/yr · Market return 12%/yr.
Buyer: EMI ≈ ₹69,426/mo. Upfront outgo = ₹20 L (down) + ₹7 L (costs) = ₹27 L day one. Property worth ~₹3.21 Cr after 20 years.
Renter: Invests ₹27 L on day one. The monthly difference between buying outflow and rent is added to or withdrawn from the portfolio. The model produces ~₹6.80 Cr after 20 years at a 12% assumed return.
Result: At these defaults the renter's portfolio substantially exceeds the buyer's property value — primarily because the high EMI-to-rent gap compounds at a strong market return. Reduce the market return or increase the property appreciation rate to see the verdict shift.
Assumptions & exclusions
• Tax benefits under the old income-tax regime (Section 24(b) interest deduction up to ₹2 L/yr for self-occupied property; Section 80C principal repayment up to ₹1.5 L/yr) are not modelled and would improve the buyer's case — but only for taxpayers who opt out of the new default regime.
• Capital gains tax on the investment portfolio at exit is not deducted — it would reduce the renter's advantage.
• Rental income from a purchased property is not included; this assumes owner-occupation.
• Market returns are assumed constant. Real returns fluctuate and can be negative in the short run.
• Property appreciation is assumed uniform. Actual appreciation varies sharply by city, micro-market, and construction quality.
• If rent eventually exceeds the available renter portfolio plus the buyer-equivalent monthly budget, the uncovered amount is carried as a negative balance rather than silently discarded.
Frequently asked questions
When does buying clearly win?
Buying becomes more competitive when the holding period and property appreciation increase, or when rent is high relative to the property's purchase price. The result still depends on every input, while stability, ownership, and landlord risk remain separate non-financial considerations.
When does renting and investing win?
Renting wins when equity markets outperform property appreciation by a meaningful margin, when upfront buying costs are high (metro cities), or when you have a shorter horizon under 10 years. High EMI-to-rent ratios favour the renter.
What is the break-even point?
A true break-even year holds the original loan terms constant and compares both paths at the end of each year. This calculator currently uses one input for both loan tenure and comparison period, so changing tenure recalculates the EMI and should not be treated as a break-even calculation.
What upfront buying cost percentage should I use?
Use the actual stamp duty, registration, brokerage, legal, and loan-processing costs for the property's state and your buyer profile. Rates and concessions vary by state, property type, transaction value, and buyer eligibility; the 7% default is illustrative.
Compare another money decision
Check loan costs, plan the down payment, or compare prepayment with investing.