Rent vs Buy Calculator

Rent vs Buy: what this calculator actually compares

The honest way to compare renting and buying is not EMI versus rent. It is net worth versus net worth. If you buy, your wealth after some years is the home you own minus the loan you still owe. If you rent, you never spend the down payment or the stamp duty, so you can invest that money, and every month the buyer pays more than you (EMI plus maintenance versus your rent) you can invest the difference too. This tool runs both paths month by month over the horizon you choose and shows where you end up in each case.

The costs of buying that people forget

A home is more than the sticker price. You put down a lump sum, then pay stamp duty and registration (this calculator uses 7% of the price, though it varies by state). You pay society maintenance, property tax and repairs year after year (assumed here at about 0.5% of the property value a year). And in the early years, most of your EMI is interest, not principal, so your equity builds slowly at first. None of that money comes back. What you keep is the equity: the home value at the end minus whatever loan is left.

The opportunity cost of the down payment

This is the part that decides most rent vs buy questions. The down payment and stamp duty are a large sum. A buyer sinks it into the home. A renter can invest it. Over ten or twenty years, that lump sum compounding at a reasonable return can grow into a serious amount. That growth is the opportunity cost of buying, and it is exactly why a low rent can beat a mortgage even though rent feels like money down the drain. The result swings on three assumptions you control here: how fast the home appreciates, what your investments earn, and how long you hold.

A worked example

Take a ₹75 lakh home with 20% down, an 8.5% loan over 20 years, rent of ₹22,000 a month, 6% home appreciation, 11% investment return, and a 10 year horizon. The buyer ends with a home worth around ₹1.34 crore but still owes roughly ₹42 lakh on the loan, for net worth near ₹92 lakh. The renter invests the ₹15 lakh down payment plus the ₹5.25 lakh stamp duty upfront, adds the monthly surplus, and ends near ₹1.23 crore. On these assumptions renting and investing comes out ahead by roughly ₹30 lakh. Change the appreciation to 9% or drop the return to 8% and the answer can flip. That sensitivity is the real lesson: your inputs, not a rule of thumb, decide it.

To dig into the loan side, try the home loan calculator to see how EMI and interest change with rate and tenure. For a deeper walkthrough of the trade off, read our note on home loan vs rent. All figures here are estimates based on the rates you enter, not a forecast or advice.