How do I use the rent vs buy calculator?

1. Enter the property details: Add the property price, your down payment percentage, the acquisition costs you expect to pay at purchase, the home loan interest rate, and the loan tenure. 2. Set the growth assumptions: Enter expected annual property appreciation and the return you expect from investing the difference, both in percent per year. 3. Enter the rent details: Add the monthly rent for a comparable home and the annual rate at which you expect rent to rise. 4. Add ongoing costs: Enter monthly maintenance for the owned home. The calculator inflates this over time so the comparison stays realistic. 5. Compare the outcomes: See the projected net worth under buying and renting, the difference, and a year by year breakdown. Use Share to save the scenario.

How should I interpret the rent vs buy result?

The calculator compares ending net worth after your selected tenure. It assumes buying builds home equity while renting invests the monthly cost difference.

What is break-even in this chart?

Break-even is the year where buy and rent net worth lines intersect or flip. Before that point one option may be better, after it the other can take over.

Are hidden ownership costs included?

Acquisition costs, covering stamp duty, registration, and brokerage, are charged to the buyer up front, and recurring maintenance is inflated at 6% annually. Property tax, insurance, and major repairs are not modelled, so treat this as directional.

Why can renting be better even if property appreciates?

If your rent is relatively low and investments compound strongly, the invested down payment plus monthly savings can outgrow the home value over time.

How sensitive is this decision to assumptions?

Very sensitive. Try changing appreciation, rent growth, loan rate, and investment return to see a realistic range before deciding.

Tools/

Rent vs Buy Calculator

Compare long-term wealth outcomes between buying a home and renting while investing the savings.

Property Value

₹10,00,000₹50,00,00,000

Down Payment %

5%50%

Acquisition Costs

0%12%

Home Loan Rate

5%15%

Loan Tenure

5 Yrs30 Yrs

Property Appreciation

2%15%

Monthly Rent

₹5,000₹5,00,000

Rent Increase / Year

2%15%

Investment Return (if renting)

5%20%

Maintenance Cost / Month

₹1,000₹50,000

Renting is better by

₹4.48 Cr

No break-even within selected tenure

Registry costs, taxes and transaction fees are estimates. Treat this as directional.

Monthly EMI

₹69,426

Total Buy Cost

₹2.16 Cr

Total Rent Paid

₹99.2 L

Buy Net Worth

₹2.65 Cr

Net Worth Over Time

Year-by-Year Breakdown

Year	Buy Net Worth	Rent Net Worth	Difference
1	₹26,59,218	₹36,69,271	-₹10,10,053
2	₹33,57,510	₹47,49,422	-₹13,91,912
3	₹40,97,369	₹59,53,950	-₹18,56,581
4	₹48,81,462	₹72,98,039	-₹24,16,577
5	₹57,12,641	₹87,98,772	-₹30,86,131
6	₹65,93,956	₹1,04,75,370	-₹38,81,413
7	₹75,28,672	₹1,23,49,460	-₹48,20,787
8	₹85,20,286	₹1,44,45,384	-₹59,25,099
9	₹95,72,538	₹1,67,90,538	-₹72,18,000
10	₹1,06,89,440	₹1,94,15,759	-₹87,26,318
11	₹1,18,75,288	₹2,23,55,757	-₹1,04,80,469
12	₹1,31,34,686	₹2,56,49,611	-₹1,25,14,925
13	₹1,44,72,573	₹2,93,41,317	-₹1,48,68,744
14	₹1,58,94,245	₹3,34,80,410	-₹1,75,86,165
15	₹1,74,05,383	₹3,81,22,665	-₹2,07,17,282
16	₹1,90,12,087	₹4,33,30,889	-₹2,43,18,801
17	₹2,07,20,903	₹4,91,75,806	-₹2,84,54,903
18	₹2,25,38,861	₹5,57,37,065	-₹3,31,98,203
19	₹2,44,73,514	₹6,31,04,365	-₹3,86,30,851
20	₹2,65,32,977	₹7,13,78,731	-₹4,48,45,754

About the rent vs buy calculator

Buying a home is as much a financial decision as an emotional one. This calculator compares two paths over the same period: buying a property with a home loan, or renting a similar home and investing the money you would have spent on a down payment and higher monthly outgo. It projects the net worth you would hold at the end of each path.

It accounts for the realities that headline comparisons miss: your EMI, the down payment, the acquisition costs paid at purchase such as stamp duty, registration and brokerage, maintenance that rises over time, property appreciation, rising rent, and the returns you could earn by investing the difference. The result shows which path leaves you wealthier and by how much.

This is a projection built on the assumptions you enter, especially property appreciation and investment returns, which are uncertain. Use it to understand the trade off rather than as a precise forecast, and revisit it as your assumptions or circumstances change.

Frequently Asked Questions

Enter the property details
Add the property price, your down payment percentage, the acquisition costs you expect to pay at purchase, the home loan interest rate, and the loan tenure.
Set the growth assumptions
Enter expected annual property appreciation and the return you expect from investing the difference, both in percent per year.
Enter the rent details
Add the monthly rent for a comparable home and the annual rate at which you expect rent to rise.
Add ongoing costs
Enter monthly maintenance for the owned home. The calculator inflates this over time so the comparison stays realistic.
Compare the outcomes
See the projected net worth under buying and renting, the difference, and a year by year breakdown. Use Share to save the scenario.

Buy net worth = property value at the end, minus any outstanding loan. Rent net worth = the invested portfolio built from the down payment and acquisition costs, plus the monthly amount saved by renting.

EMI is computed from the loan amount, interest rate, and tenure
The buyer's wealth is home equity: appreciated property value minus the loan still owed
Acquisition costs are cash the buyer spends at purchase that buys no equity; they raise the total cost of buying and are counted once, through the renter investing the same amount instead
The renter invests the same up-front cash, the down payment plus acquisition costs, and each month's saving (EMI plus maintenance, minus rent) at the expected return
Rent and maintenance both rise each year at their assumed rates

When the buyer's monthly outgo is higher than rent, the renter invests the difference; when rent is higher, that gap reduces the renter's investible surplus, and the renter's position can turn negative. The path with the larger ending net worth is the financially better choice on these assumptions.

A worked example

Suppose a ₹1,00,00,000 property with a 20% down payment, 7% acquisition costs, an 8.5% home loan over 20 years, 6% annual appreciation, rent of ₹30,000 rising 7% a year, 11% returns on investments, and ₹3,000 monthly maintenance.

Monthly EMI: ₹69,426
Down payment: ₹20,00,000
Acquisition costs: ₹7,00,000
Buying net worth after 20 years: ₹3,20,71,355
Renting and investing net worth: ₹4,61,56,262
Difference: ₹1,40,84,907 in favour of renting

On these assumptions, renting and investing the difference ends about ₹1,40,84,907 ahead, because 11% investment returns outpace 6% property appreciation. The ₹7,00,000 of stamp duty, registration and brokerage never becomes equity; the renter invests it instead, where it grows to roughly ₹62,54,511 over the 20 years. Lower the assumed returns or raise appreciation and rent, and buying can pull ahead, which is why the assumptions drive the answer.

The outcome is highly sensitive to the appreciation and investment return you assume. Small changes can flip the result, so test a range of scenarios.
The model assumes the renter actually invests the difference every month. In practice, money not spent on a home is often spent elsewhere, which favours buying as a forced saving.
Acquisition costs cover stamp duty, registration and brokerage, and are estimates that vary by state and deal. Property tax, insurance, major repairs, the security of owning and the flexibility of renting sit outside the numbers, so weigh them alongside.
Rent is money spent, while EMI builds equity over time, but a home is far less liquid than a portfolio. Consider how easily you may need to access the money.

Decide with your full balance sheet in view

See how a home loan would sit against your investments, cash and income before you commit.

Decide with your balance sheet

Rent vs Buy Calculator

Inputs

Results

Net Worth Over Time

About the rent vs buy calculator

Frequently Asked Questions

Decide with your full balance sheet in view

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