How to read the chart
The gold line is the owner's home equity. The navy line is the renter's invested money. Where the gold line crosses above navy, buying has caught up.
Rent vs buy calculator
The renter invests the down payment, the buying costs and every month's saving over rent. The owner pays EMI plus upkeep. No tax benefits (Section 24 or 80C) and no tax on investment returns are included, which would favour buying slightly and renting slightly.
75 lakh
%
%
years
25 thousand
years
%
%
%
%
%
Renting comes out ahead by
₹63,81,724
On these numbers renting stays ahead for the whole period.
- Owner's net worth
- ₹1,30,22,690
- Renter's portfolio
- ₹1,94,04,414
- Monthly EMI
- ₹53,023
0715
Renting and investing versus buying: how to compare fairly
A fair comparison counts the same money on both sides. If you buy, you put down a deposit and pay EMI and upkeep. If you rent, you pay rent and still have the deposit, plus whatever you would have spent above rent. The honest version invests all that and compares net worth after some years.
Take a ₹75 lakh flat in a metro. A 20% down payment is ₹15 lakh and the loan is ₹60 lakh at 8.75% for 20 years, an EMI of about ₹53,000. A similar flat might rent for ₹25,000. The renter has ₹28,000 a month and a ₹15 lakh deposit to invest. At 10% over 15 years, that portfolio grows large. The owner holds a flat that, at 5% growth, is worth about ₹1.56 crore, minus whatever loan remains.
Which way it falls depends mostly on three things: the rent-to-price ratio, how fast the home appreciates, and what your investments earn. High rent against price favours buying. High investment returns favour renting. Staying a long time favours buying, because buying costs of 6% or so need years to recover.
None of this counts the non-financial side. A home you own gives you stability, no rent hikes and no landlord. A rented flat gives you the freedom to move for a job. Run a few cases, change the growth and return assumptions, and treat the result as a range, not a verdict.
Sources
What this calculator does not account for
- Tax benefits on a home loan and tax on investment gains.
- Rent and price growth, which are never steady in real life.
- Maintenance shocks, vacancy, or the value of owning a home you can live in.
How this is calculated
Formula: Net worth, each path
Buy: value − loan balance. Rent: portfolio grown at the investment returnWhat the symbols mean
- valueHome price growing at your assumed rate.
- portfolioDown payment plus the monthly gap between owner's cost and rent, invested.
Good to know
- The loan is a normal reducing-balance EMI, the same as the loan EMI calculator.
- Add stamp duty and registration with the stamp duty calculator.
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Worked examples
Each example is worked out by the same code as the calculator above.
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<iframe src="/embed/rent-vs-buy" title="Rent vs buy" width="100%" height="720" style="border:0;max-width:42rem" loading="lazy"></iframe>Questions
Is it better to rent or buy in India?
In many big cities rent is only 2 to 3% of the home's value a year, while the loan costs 8.5% or more. That tilts the maths towards renting, unless prices grow fast. Wanting a home of your own is a fair reason to buy anyway.
What home price growth should I use?
Long-run averages in most Indian cities are around 4 to 7% a year, with big differences by city and by decade. Try a low and a high figure.
Does the calculator include tax benefits?
No. Home loan interest and principal deductions under the old regime favour buying a little, while tax on investment gains favours it too.
Why does renting win in some runs?
A large down payment invested at 10% can beat a home growing at 5%. Buying wins when prices rise quickly or you stay long enough for the loan to be paid down.