Buying & Ownership Costs · Free Tool
Rent vs Buy Calculator
A transparent, assumption-driven comparison of buying a home versus renting and investing the difference.
Your Assumptions
What money not spent on buying could earn if invested.
Net Worth if You Buy
₹1.4 Cr
after 15 yrs
Net Worth if You Rent
₹1.7 Cr
after 15 yrs
Difference
₹35.3 L
in favour of renting
Transparent Comparison
Buying
- Upfront cash (down payment + costs)
- ₹22,00,000
- Monthly EMI
- ₹55,541
- Interest paid in 15 yrs
- ₹63,04,442
- Maintenance + tax paid
- ₹6,30,000
- Property value at end
- ₹1,66,31,425
- Loan still outstanding
- − ₹27,07,119
- Buyer’s net worth
- ₹1,39,24,307
Includes any monthly savings invested when buying costs less than renting.
Renting
- Rent paid in 15 yrs
- ₹64,73,569
- Upfront cash invested instead
- ₹22,00,000
- Renter’s net worth
- ₹1,74,57,196
Invested savings, including the monthly difference whenever rent costs less than owning.
Neither option is universally better. The result depends heavily on appreciation, rent growth, and the return you actually earn on invested savings. Change these assumptions to see how sensitive the outcome is.
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How this calculator works
Comparing EMI with rent is not enough, because buying ties up a down payment and adds ownership costs, while the home itself can appreciate. This calculator compares the net worth you would have at the end of the period under each path.
To keep the comparison fair, both paths spend the same money every month. The renter invests the down payment and purchase costs instead of spending them. Each month, whichever path is cheaper invests the difference at the return you set. At the end, the buyer’s net worth is the property value minus any loan outstanding, plus their investments. The renter’s net worth is their investment portfolio.
The chart shows both net worths year by year. The result depends heavily on property appreciation, rent growth and investment returns, so try several combinations.
Formula
Buyer net worth = Property Value × (1 + a)ᵗ − Loan Outstanding + Buyer Investments
Renter net worth = (Down Payment + Costs) grown at R + monthly savings invested at R
Monthly savings = |(EMI + Maintenance + Tax ÷ 12) − Rent|, invested by the cheaper side
- a
- property appreciation
- R
- return on invested savings
Assumptions
- Maintenance and property tax stay at today’s levels. Rent rises by the annual increase you set.
- Investment returns are steady and shown before tax. Real returns vary.
- Selling costs, tax benefits on home loans, HRA and capital gains tax are not modelled.
- Non-financial factors such as stability, flexibility and the freedom to modify your home are not captured.
Frequently asked questions
Is buying better than renting in the long run?
Not universally. Buying tends to come out ahead when property appreciation is strong, you stay long enough to recover transaction costs, and rent is high relative to price. Renting can come out ahead when prices are high relative to rents and invested savings earn a good return.
Why does the renter invest the down payment?
Because a fair comparison must account for what that money could have earned. Without it, renting looks artificially worse.
How long should I compare for?
Use the number of years you realistically expect to stay. Over short periods, purchase costs usually make buying look worse. Over longer periods, appreciation and the end of EMIs can tip the balance.
What matters besides the numbers?
Stability for family, freedom to renovate, job mobility, and the discipline to actually invest the savings if you rent. These are personal and can reasonably outweigh a modest financial difference.
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