What is this Tool?
The Rent vs Buy Calculator helps you make one of the most important financial decisions of your life — whether to continue renting or buy a home. Both options have financial implications that go beyond just comparing rent and EMI. This tool compares your EMI with your rent, then projects your net worth after the number of years you choose — including property price growth, rent increases, maintenance, stamp duty and the returns you could earn by investing your down payment and any monthly savings instead.
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Frequently Asked Questions
Is buying always better than renting?
No. Where property prices are high compared with rent — common in big Indian cities — renting and investing the difference can build more wealth, especially over shorter periods. Buying tends to do better when you stay put for many years, get a low loan rate and property prices rise steadily. Enter your own numbers above to see which way your situation leans.
What is opportunity cost in rent vs buy?
Money you put into a down payment, stamp duty and registration can't be invested elsewhere. The calculator assumes a renter invests that money instead, plus any month where rent is lower than the buyer's EMI and upkeep. The growth on that money is the opportunity cost of buying.
When does buying a house make financial sense?
Buying usually makes more sense when you plan to stay in the same city for a long time (often 7–10 years or more), have a stable income and an emergency fund, can make a sizeable down payment, and the EMI fits comfortably in your budget. Non-financial reasons — stability, no landlord, a home of your own — matter too.
Does this include maintenance and stamp duty?
Yes. Maintenance and property tax are included as a yearly percentage of the home's value (default 1%), and stamp duty plus registration as a one-time percentage (default 6%). Change both in the Long-Term Assumptions box to match your city and building.
How does this rent vs buy calculator work?
It simulates both choices month by month. The buyer pays the EMI plus maintenance and owns a home that grows at your chosen rate. The renter pays rent that rises every year and invests the down payment, purchase costs and any monthly savings at your chosen return. After the chosen number of years it compares the buyer's home value minus the remaining loan (plus any investments) with the renter's investments.
What is the price-to-rent ratio?
Price-to-rent ratio = property price ÷ yearly rent for a similar home. An ₹80 lakh flat renting for ₹25,000 a month (₹3 lakh a year) has a ratio of about 27. The higher the ratio, the more expensive buying is compared with renting.
What is rental yield and why does it matter?
Rental yield is yearly rent as a percentage of the property price. In many Indian cities residential yields are low — often around 2–4% — while home loans cost 8–9%. That gap is why renting and investing can come out ahead in the numbers, especially over shorter periods.
What property price growth should I assume?
Use a conservative, realistic figure for your city and property type — and try a few. Prices can stay flat for years in some markets. The default of 5% a year is only a starting point; test 3%, 5% and 7% to see how sensitive your result is.
What investment return should I assume for the renter?
Use a return you'd realistically earn on the money — for example a lower figure for fixed deposits or debt funds and a higher one for a diversified equity portfolio held for many years. The default is 10%. Investment returns aren't guaranteed, so test a range.
Are home loan tax benefits included?
No. Under the old tax regime, interest on a self-occupied home loan can be deducted up to ₹2 lakh a year under Section 24(b) and principal counts towards Section 80C. Under the new regime these deductions generally aren't available. If they apply to you, buying will look somewhat better than shown.
How much down payment do I need to buy a house in India?
RBI rules cap how much banks can lend against a home's value: up to 90% for loans up to ₹30 lakh, 80% for ₹30–75 lakh and 75% above ₹75 lakh. So you usually need 10–25% of the price as down payment, plus stamp duty, registration and other costs, which banks generally don't finance.
How much are stamp duty and registration charges?
They depend on your state and sometimes on the buyer — many states charge around 5–7% stamp duty plus about 1% registration, and some offer a concession for women buyers. Check your state's current rates and enter the total in the Long-Term Assumptions box.
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