How to use the rent vs buy calculator
- Enter the price of the home and the rent for a similar home nearby.
- Set your down payment, home loan rate and tenure.
- Adjust stamp duty and registration for your state, plus maintenance and property tax.
- Choose how fast you expect rent and home prices to rise, and the return on invested savings.
- Read the net worth of each path, the break-even year and the appreciation needed for buying to match renting.
How the comparison works
- Buyer: pays the down payment, stamp duty and registration, then the EMI, maintenance and property tax. Net worth = home value − loan left + any invested surplus.
- Renter: invests the same upfront money, pays rent, and invests the gap between the owner's monthly cost and the rent. Net worth = the investments.
- Home value = price × (1 + appreciation)years. The EMI uses the standard reducing-balance formula.
Home price growth decides most of it
| Appreciation | Buy net worth | Rent net worth | Break-even | Ahead |
|---|---|---|---|---|
| 3% | ₹1.81 Cr | ₹4.25 Cr | Not in 20 years | Rent |
| 5% | ₹2.65 Cr | ₹4.25 Cr | Not in 20 years | Rent |
| 7% | ₹3.87 Cr | ₹4.25 Cr | Not in 20 years | Rent |
| 9% | ₹5.6 Cr | ₹4.25 Cr | Year 3 | Buy |
₹1 Cr home, 20% down, 8.5% for 20 years, 7% stamp duty and registration, rent ₹30,000 rising 5% a year, 10% return on investments, after 20 years.
And so does the rent
| Monthly rent | Rental yield | Buy minus rent | Ahead |
|---|---|---|---|
| ₹20,000 | 2.4% | -₹2.63 Cr | Rent |
| ₹30,000 | 3.6% | -₹1.6 Cr | Rent |
| ₹40,000 | 4.8% | -₹56.73 L | Rent |
| ₹50,000 | 6% | ₹46.27 L | Buy |
Same home and loan, 5% appreciation. Already renting? Check the tax-free part of your rent with the HRA calculator.
Frequently asked questions
Is it better to rent or buy a house in India?
It depends mostly on the rent compared with the price, how fast the home appreciates, and what you would earn by investing instead. With a ₹1 Cr home, 20% down, an 8.5% loan, rent of ₹30,000 rising 5% a year, 5% appreciation and a 10% investment return, renting comes out about ₹1.6 Cr ahead after 20 years. Change any of these and the answer can flip.
How does this calculator compare renting and buying fairly?
Both households start with the same money. The buyer spends it on the down payment, stamp duty and registration; the renter invests it. Every month, whoever has the smaller housing bill invests the difference. Net worth is home value minus the loan left plus investments for the buyer, and investments for the renter.
What stamp duty and registration should I enter?
It varies by state and sometimes by the buyer's gender and the property's value. For example, Delhi charges 6% stamp duty for men and 4% for women plus 1% registration, and Mumbai charges 6% plus 1% registration capped at ₹30,000. Check your state's registration department for the current rate.
Are home loan tax benefits included?
No. In the old tax regime you can deduct up to ₹2 lakh a year of interest on a self-occupied home, and principal repayments count towards the ₹1.5 lakh limit for tax-saving investments. The new regime, which is the default, gives no deduction for a self-occupied home. If you use the old regime, buying will look somewhat better than shown.
What is a good rent-to-price ratio?
Yearly rent divided by the price is the rental yield. Homes in big Indian cities often yield 2–4%, well below home loan rates of around 8–9%, so renting and investing frequently wins on paper unless prices rise quickly. Where yields are higher or prices rise faster, buying catches up sooner.
What does the calculator leave out?
Selling costs such as brokerage, capital gains tax on the home or investments, moving costs, interior and furnishing costs, and the non-financial value of owning your home. Treat the result as a guide to the money side of the decision.