Financial Calculators
Rent vs Buy Calculator
Buying is not automatically building wealth, and renting is not automatically throwing money away. Run the numbers.
Renting leaves you ahead by
₹2,47,36,397
after 20 years, on these assumptions
- Buyer's wealth (home + investments - loan)
- ₹3,20,71,355
- Renter's wealth (all savings invested)
- ₹5,68,07,751
- Monthly EMI
- ₹69,426
- Total rent paid
- ₹99,19,786
- Total EMI paid
- ₹1,66,62,206
Whichever path costs less each month invests the difference at the return you set, and the renter invests the down payment on day one. The answer swings on three inputs: property appreciation, investment return and how long you stay. Registration, maintenance and the value of owning your own roof are left for you to weigh.
These figures are for illustrative purposes only and are not investment advice. Please consult your investment adviser for investment related advice.
Two households, twenty years
The buyer puts down a deposit, pays an EMI, and ends up owning a home that has (hopefully) appreciated. The renter invests the deposit on day one, pays rent that rises each year, and invests every rupee by which the rent is cheaper than the EMI. After the chosen number of years, who has more? The answer depends almost entirely on three assumptions: how fast property appreciates, what invested savings earn, and how long you stay.
The calculator runs both households month by month. In the early years rent is far below the EMI and the renter invests heavily; later, rent catches up and the buyer's loan shrinks. Try several sets of assumptions rather than trusting one.
Two exact simulations
Buyer: wealth = property x (1+a)^years + invested surplus - loan outstanding\nRenter: wealth = down payment invested + monthly (EMI - rent) invested, both at r\nRent rises yearly; whichever path is cheaper each month invests the differenceWorked example: a Rs 1,00,00,000 home with 20% down and a Rs 80,00,000 loan at 8.5% over 20 years has an EMI of Rs 69,426. Renting a similar home at Rs 25,000 a month rising 5% a year, and investing the deposit and the monthly difference at 12%, the renter ends 20 years with Rs 5,68,07,751. With the property appreciating 6% the buyer ends with Rs 3,20,71,355. On these assumptions renting leaves you ahead by Rs 2,47,36,397; at 9.5% appreciation, or an 8% investment return, the answer flips.
Frequently asked questions
The result seems to favour renting. Why?
Because the default assumes a 12% investment return against 6% property appreciation, and the renter invests far more in the early years. Raise appreciation or lower the return and buying wins. The calculator's job is to show how sensitive the answer is, not to pick a side.
What is left out?
Stamp duty and registration, maintenance and society charges, the tax deduction on home loan interest, tax on the renter's investment gains, and the non-financial value of owning. Stamp duty and maintenance both favour renting; the tax deduction favours buying.
Does the renter really invest the difference?
That is the honest assumption and the one most renters fail. If you will not invest the surplus, the comparison collapses and buying is the forced-savings plan that works.
Where does this leave a serving officer who moves every few years?
Frequent transfers favour renting where you are posted and, if you buy, buying where you will eventually settle. The horizon input should be years you will actually live in the house.
Decide the roof with your eyes open.
We run rent-vs-buy with your real numbers, then plan the down payment or the investment plan that follows.