Why not just compare the EMI against the rent?

Because it leaves out the down payment and stamp duty. A renter still has that money and can invest it, and over a long horizon that compounding is often larger than the property's appreciation.

Which assumption changes the answer most?

The gap between property appreciation and your investment return. Everything else matters much less. Try a range of both rather than trusting one pair of numbers.

How long do I need to stay for buying to make sense?

Usually eight to ten years at minimum. Around 9% of the price goes on stamp duty, registration and selling costs, and early EMIs are almost all interest. Under five years, renting almost always wins.

How much do the home loan tax benefits help?

Up to about ₹1.05 lakh a year at a 30% slab, but only in the old regime, and the 80C portion is shared with EPF and PPF. Many people get far less than the headline figure.

What is a rental yield and what does it tell me?

Annual rent as a share of the price. Below about 3% favours renting, above 5% favours buying. Most Indian cities sit at 2% to 3.5%, which is a renter-friendly range.

Does this settle the decision?

No. It tells you the financial cost or gain, not whether to buy. Security of tenure and freedom to renovate are real benefits — this shows you what they cost.

I already own a home. Is this still useful?

Yes. Use it to check whether holding your current property beats selling and investing, and to test the case for a second purchase, which is usually weaker than the first.

LoansUpdated August 1, 2026

Rent vs Buy Calculator

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.

How to use this calculator

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.

Quick facts

Comparison basis: Net worth, not monthly outgo
Renter's advantage: Down payment stays invested
Buyer's advantage: Leverage plus a fixed EMI
Tax relief modelled: 24(b) and 80C, old regime

The property

What the home costs to buy, hold and eventually sell.

Property price

₹

Adjust price

₹10,00,000₹5,00,00,000

Down payment

Adjust down payment

5%60%

Home loan rate

Loan tenure

yrs

EMI: ₹69,426 a month.

Stamp duty

Registration and legal

Interiors and fit-out

₹

Total cash needed on day one: ₹37,00,000. This is the money the renter invests instead.

Monthly maintenance

₹

Property tax a year

₹

Home insurance a year

₹

Repairs a year

Annual appreciation

Adjust appreciation

0%15%

Cost of selling

Renting and investing

What renting the same home costs, and what the renter earns on the money not spent buying.

Monthly rent

₹

Adjust rent

₹5,000₹3,00,000

Annual rent increase

Security deposit

months

Rent reaches ₹77,356 a month by year 15, while the EMI stays fixed at ₹69,426.

Return on invested money

Adjust return

0%18%

General inflation

Compare over

yrs

Adjust horizon

5102030

The horizon matters more than most people expect. Buying almost never wins over five years, because stamp duty and selling costs have too little time to be absorbed.

Claim home loan tax benefits

Up to ₹2 lakh of interest under 24(b) and ₹1.5 lakh of principal under 80C. Old regime only.

Your income tax slab

Tax relief over the horizon: ₹15,75,000.

After 15 years

Renting and investing comes out ahead

Renting and investing leaves you ₹1,37,38,053 better off in net worth terms.

Net worth if you buy: ₹2,01,02,372
Net worth if you rent and invest: ₹3,38,40,425
Difference: −₹1,37,38,053

Buying does not overtake renting at any point within 15 years on these assumptions.

If you buy

₹2,01,02,372

Sale value after costs, minus whatever is still owed on the loan.

Property worth: ₹2,39,65,582
Total spent on owning: ₹1,78,24,673
Interest paid to the bank: ₹78,80,553
Tax relief claimed: ₹15,75,000

If you rent and invest

₹3,38,40,425

The portfolio built from money the purchase would have consumed, plus the refundable deposit.

Portfolio value: ₹3,37,80,425
Total rent paid: ₹90,46,448
Invested up front: ₹36,40,000
Final monthly rent: ₹77,356/mo

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.

Net worth on each path

The crossover is the break-even point. Before it, the buyer is behind because stamp duty and early interest have not been earned back.

The buyer starts below zero because the down payment, stamp duty and interiors are spent immediately. The renter starts at zero but with that same money invested.

Where the money goes

Total cash out over the period, and what you are left holding at the end.

Paying more out does not mean losing: the buyer's outflow includes principal, which converts into equity rather than disappearing.

Property value against loan balance

Equity is the gap between the two. It grows from both directions as the property appreciates and the loan amortises.

Selling at the horizon costs ₹4,79,312 in brokerage and transfer charges, which is already netted off the buy figures.

Year-by-year comparison

Both paths side by side, with the yearly cost of each and the net worth they leave you holding.

Year-by-year comparison
Year	Cost of owning	Rent paid	Loan left	Net worth: buy	Net worth: rent	Buy advantage
Year 1	₹8,65,721	₹3,60,000	₹78,40,782	₹25,47,218	₹46,58,077	−₹21,10,859
Year 2	₹8,73,977	₹3,85,200	₹76,67,490	₹33,43,790	₹57,09,033	−₹23,65,243
Year 3	₹8,82,730	₹4,12,164	₹74,78,881	₹41,93,076	₹68,62,268	−₹26,69,192
Year 4	₹8,92,007	₹4,41,015	₹72,73,600	₹50,98,674	₹81,28,171	−₹30,29,497
Year 5	₹9,01,840	₹4,71,887	₹70,50,175	₹60,64,436	₹95,18,227	−₹34,53,791
Year 6	₹9,12,264	₹5,04,919	₹68,07,000	₹70,94,487	₹1,10,45,134	−₹39,50,647
Year 7	₹9,23,313	₹5,40,263	₹65,42,332	₹81,93,245	₹1,27,22,939	−₹45,29,695
Year 8	₹9,35,026	₹5,78,081	₹62,54,269	₹93,65,442	₹1,45,67,180	−₹52,01,738
Year 9	₹9,47,441	₹6,18,547	₹59,40,744	₹1,06,16,150	₹1,65,95,052	−₹59,78,902
Year 10	₹9,60,600	₹6,61,845	₹55,99,506	₹1,19,50,802	₹1,88,25,589	−₹68,74,787
Year 11	₹9,74,550	₹7,08,174	₹52,28,106	₹1,33,75,220	₹2,12,79,862	−₹79,04,641
Year 12	₹9,89,336	₹7,57,747	₹48,23,877	₹1,48,95,648	₹2,39,81,207	−₹90,85,559
Year 13	₹10,05,010	₹8,10,789	₹43,83,918	₹1,65,18,779	₹2,69,55,474	−₹1,04,36,696
Year 14	₹10,21,624	₹8,67,544	₹39,05,071	₹1,82,51,788	₹3,02,31,302	−₹1,19,79,514
Year 15	₹10,39,235	₹9,28,272	₹33,83,898	₹2,01,02,372	₹3,38,40,425	−₹1,37,38,053
Total	₹1,41,24,673	₹90,46,448		₹2,01,02,372	₹3,38,40,425

The cost of owning is shown net of any tax relief claimed, which is why it can be lower than the EMI plus upkeep.

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How the comparison works

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 month

Property value

Appreciated price

Purchase price compounded at the appreciation rate over the holding period.

Cost of owning

Monthly ownership cost

EMI plus maintenance, property tax, insurance and repairs, less any tax relief.

Portfolio

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.

Deposit

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.

Assumptions

Property appreciates at a steady annual rate, which real property markets do not.
The renter genuinely invests the down payment, the stamp duty and every month renting is cheaper — the whole case collapses if that money is spent instead.
Rent rises annually at the rate you set, while the EMI stays fixed for the full tenure.
Interiors are treated as a sunk cost that adds nothing to resale value.
Tax relief is spread across the year as reduced TDS rather than claimed as a refund.
The buyer is assumed to sell at the horizon, so selling costs are netted off. Holding on instead avoids that cost but leaves the wealth illiquid.
No capital gains tax is applied to either the property sale or the renter's portfolio.

Frequently asked questions

Answers about the rent vs buy calculator.

Because it ignores the largest number in the decision. Buying a ₹1 crore home takes roughly ₹37 lakh in cash before you move in — the down payment, stamp duty, registration and interiors. A renter still has that money and can invest it. Over fifteen years at 11%, ₹37 lakh becomes more than ₹1.7 crore on its own. Comparing only the monthly figures makes buying look cheap by leaving out the single biggest cost of it.

Related calculators

Continue exploring adjacent tools in this topic.

Guides that explain this

Background reading on the ideas behind these numbers.

Loans

Reading a loan offer: the numbers that matter

A sanction letter draws your eye to the interest rate and the EMI. Neither is the number that decides what the loan costs you. Here is what to look at instead, and which clauses are worth negotiating before you sign.

Jul 9, 20268 min read

This tool is provided for educational purposes only. Results are estimates based on the values you enter and do not constitute financial advice.

Year

Cost of owning

Rent paid

Loan left

Net worth: buy

Net worth: rent

Buy advantage

Year 1

₹8,65,721

₹3,60,000

₹78,40,782

₹25,47,218

₹46,58,077

−₹21,10,859

Year 2

₹8,73,977

₹3,85,200

₹76,67,490

₹33,43,790

₹57,09,033

−₹23,65,243

Year 3

₹8,82,730

₹4,12,164

₹74,78,881

₹41,93,076

₹68,62,268

−₹26,69,192

Year 4

₹8,92,007

₹4,41,015

₹72,73,600

₹50,98,674

₹81,28,171

−₹30,29,497

Year 5

₹9,01,840

₹4,71,887

₹70,50,175

₹60,64,436

₹95,18,227

−₹34,53,791

Year 6

₹9,12,264

₹5,04,919

₹68,07,000

₹70,94,487

₹1,10,45,134

−₹39,50,647

Year 7

₹9,23,313

₹5,40,263

₹65,42,332

₹81,93,245

₹1,27,22,939

−₹45,29,695

Year 8

₹9,35,026

₹5,78,081

₹62,54,269

₹93,65,442

₹1,45,67,180

−₹52,01,738

Year 9

₹9,47,441

₹6,18,547

₹59,40,744

₹1,06,16,150

₹1,65,95,052

−₹59,78,902

Year 10

₹9,60,600

₹6,61,845

₹55,99,506

₹1,19,50,802

₹1,88,25,589

−₹68,74,787

Year 11

₹9,74,550

₹7,08,174

₹52,28,106

₹1,33,75,220

₹2,12,79,862

−₹79,04,641

Year 12

₹9,89,336

₹7,57,747

₹48,23,877

₹1,48,95,648

₹2,39,81,207

−₹90,85,559

Year 13

₹10,05,010

₹8,10,789

₹43,83,918

₹1,65,18,779

₹2,69,55,474

−₹1,04,36,696

Year 14

₹10,21,624

₹8,67,544

₹39,05,071

₹1,82,51,788

₹3,02,31,302

−₹1,19,79,514

Year 15

₹10,39,235

₹9,28,272

₹33,83,898

₹2,01,02,372

₹3,38,40,425

−₹1,37,38,053

Total

₹1,41,24,673

₹90,46,448

₹2,01,02,372

₹3,38,40,425

Assumptions

Property appreciates at a steady annual rate, which real property markets do not.

The renter genuinely invests the down payment, the stamp duty and every month renting is cheaper — the whole case collapses if that money is spent instead.

Rent rises annually at the rate you set, while the EMI stays fixed for the full tenure.

Interiors are treated as a sunk cost that adds nothing to resale value.

Tax relief is spread across the year as reduced TDS rather than claimed as a refund.

The buyer is assumed to sell at the horizon, so selling costs are netted off. Holding on instead avoids that cost but leaves the wealth illiquid.

No capital gains tax is applied to either the property sale or the renter's portfolio.