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Compare renting against buying on net worth rather than on EMI against rent, so the down payment, stamp duty and the returns you forgo are all counted. Find the year buying pulls ahead — if it does.
Step 1
Describe the property
Price, down payment, loan terms and the one-time costs — stamp duty and registration alone are often 7% of the price.
Step 2
Enter the rent on a comparable home
Rent for something you would actually be happy living in, not the cheapest option available.
Step 3
Set the two rates that decide it
Property appreciation and the return on invested money. Small changes to either can flip the verdict.
After 15 years
Renting and investing comes out ahead
Renting and investing leaves you ₹1,37,38,053 better off in net worth terms.
If you buy
₹2,01,02,372
Sale value after costs, minus whatever is still owed on the loan.
If you rent and invest
₹3,38,40,425
The portfolio built from money the purchase would have consumed, plus the refundable deposit.
Break-even point
Beyond the horizon
Owning never overtakes renting within the period you selected.
Rental yield on this home
3.6%
Annual rent as a share of the purchase price. Below about 3% usually favours renting; above 5% favours buying.
Both paths are simulated month by month and compared on net worth. The buyer accumulates equity in an appreciating asset; the renter accumulates a portfolio funded by the money the purchase would have consumed.
Buy net worth = Property value × (1 − selling cost) − Loan outstanding
Rent net worth = Portfolio + Deposit
Portfolio grows on (Cost of owning − Rent) each monthAppreciated price
Purchase price compounded at the appreciation rate over the holding period.
Monthly ownership cost
EMI plus maintenance, property tax, insurance and repairs, less any tax relief.
Renter's investments
Seeded with the down payment, stamp duty and interiors, then grown at the investment return and topped up whenever renting costs less than owning.
Security deposit
Refundable, so it stays part of the renter's net worth.
The break-even year is the first year buying is ahead and never falls behind again. Requiring it to stay ahead avoids reporting a crossover that the renter's compounding later reverses.
Paying cash (or a large down payment) forgoes whatever that money might have earned invested. Paying EMI keeps more cash invested but adds interest and a long liability. This tool sketches both paths under the return and inflation assumptions you type. It will not tell you which house to buy.
Total interest, how long cash is locked, tax relief that exists only in the old regime and only up to statutory caps, and whether you could actually invest the “saved EMI” every month. If you would spend it, the investment side of the sketch is fiction. Liquidity — an emergency fund — is a separate tool.
Raise the assumed investment return and buying on EMI can look cheaper in the illustration. Lower it and cash purchase can look better. That swing is why this page refuses to print “always rent” or “always buy.” Use it as a scenario machine, then verify rates, fees and tax with the lender and a professional.
Answers about the rent vs buy calculator.
Continue exploring adjacent tools in this topic.
Guides that explain the ideas behind these numbers.
These figures are estimates based on the values and assumptions you enter. Market returns are not guaranteed. Tax, brokerage and other rules can change. Finaura is an educational tool, not personalised financial, tax, investment or legal advice. Confirm important decisions with the relevant institution or a qualified professional.