Rent vs Buy Calculator
Should you rent or buy? Compare 10-year net worth under both scenarios. Free, privacy-first — inputs never leave your browser.
Inputs
Buy
Better₹1,62,88,946
Down Payment
₹20,00,000
Total Paid
₹1,03,31,103
Property Value
₹1,62,88,946
Rent + Invest
₹1,37,15,095
Total Invested
₹53,57,182
Investment Value
₹1,37,15,095
Verdict
After 10 years, buying results in higher net worth.
For estimation only. Not professional financial, tax, or legal advice. Consult a qualified advisor before making decisions. Full disclaimer.
Rent vs Buy — the honest math
The buying-is-always-better argument ignores opportunity cost. If you rent cheaply and invest the down payment + EMI-rent difference at 12%, you may end up with more net worth than a home buyer. The verdict depends on: property appreciation rate, rental yield in your city, investment returns, and how long you stay. Bangalore/Pune rental yields ~2-3% favour renting; tier-2 cities with 4-5% favour buying.
Common questions about Rent vs Buy
Is it better to rent or buy a home in India?+
Depends on rental yield, tenure, and market. Indian residential rental yield is typically 2%-3.5% — much lower than home loan interest (8.5%-9%). Mathematically, renting + investing the down payment + EMI differential in equity often outperforms buying over 5-10 years in most metros. Buying wins long-term (15+ years), in growth-corridor cities, or when cultural/emotional value outweighs financial math.
What is the price-to-rent ratio and what's a good number?+
Price-to-rent = property price ÷ annual rent. A ratio under 15 favours buying; 15-20 is neutral; above 20 strongly favours renting. Mumbai, Bengaluru: often 35-50 (massively favours renting). Tier 2 cities: often 15-20 (closer to neutral). Combine this with expected capital appreciation (7% for Tier 1 metros, 5% for Tier 2) and opportunity cost of equity SIPs (12%) to make a full decision.
What costs are hidden in buying a home?+
Stamp duty (5%-7%), registration (1%-2%), GST on under-construction (5%), maintenance deposit (₹50k-2L), society transfer fees, broker (2%), legal verification (₹15k-25k), interior setup (₹5-20 lakh). Ongoing: property tax (0.5%-1% of value), society maintenance (₹3-10/sqft/month), repairs (~1% of value/year). Total "all-in" cost of buying is typically 12%-15% above ticket price, often ignored in simple rent-vs-buy comparisons.
How does home ownership affect my credit profile?+
A disciplined home loan repayment record boosts credit score by 30-50 points over 3-5 years — lenders see real-estate-backed loans as highest-quality credit history. However, the large EMI reduces debt-to-income capacity, limiting future loans (car, personal, business). For entrepreneurs who may need business loans, staying liquid via renting can be strategically better during career-building years.
When does owning beat renting mathematically?+
When: (a) you plan to stay 10+ years (amortisation savings compound); (b) property price grows 7%+ annually (matches typical Tier 1 metro); (c) tax benefits are meaningful (80C ₹1.5L + 24(b) ₹2L, OLD regime only); (d) rental yield in your market is 4%+ (rare in India). In most high-income metro situations for 5-7 year horizons, disciplined rent-and-invest typically outperforms buy-and-own.
What tax benefits do I lose by renting?+
You gain HRA exemption (salaried, old regime) — typically ₹1-3 lakh deduction/year. You lose: Section 24(b) home loan interest (₹2L) and 80C principal repayment (₹1.5L). Rough math: a salaried 30% bracket taxpayer with both loan + HRA benefits (only possible in special cases) saves ₹1-1.5 lakh more tax vs renting alone. New regime users get neither — skews slightly toward renting.