Rent vs Buy Calculator
Buy or rent? Your net worth both ways, year by year, and when buying pulls ahead.
Net worth, year by year
Year by year
How this was calculated
Results are estimates for general information and planning, not financial advice. Banks and institutions may calculate differently (rounding, fees, rate changes). Confirm figures with your lender or a qualified adviser before deciding.
About the Rent vs Buy Calculator
Should you buy the home or rent one like it and invest the money you would have put into it? This calculator follows both choices month by month for as many years as you choose. Buying costs the down payment, stamp duty and registration, the EMI, maintenance, property tax and insurance — and builds a home that may grow in value. Renting costs the rent, rising every year, and leaves the down payment and every month’s difference invested at the return you choose.
At the end of each year it shows your net worth both ways, the year buying pulls ahead (if it does), and the home-price growth at which the two end level — usually the number that decides it. Optional old-regime tax benefits on the home loan are included when you tick them. Everything is calculated in your browser.
How to use it
- Under Buying, enter the price, the down payment (as a % or an amount), the home-loan rate and tenure, and the stamp duty and registration for your state.
- Add the running costs of owning — maintenance, property tax and insurance — how fast they rise, how fast you expect the home’s value to grow, and the cost of selling.
- Under Renting, enter the rent for a similar home, how fast rents rise and the security deposit.
- Enter the return you would earn on money you invest instead, and the number of years to compare.
- If you file under the old regime, open Indian tax benefits and tick them on, with your tax rate.
- Read who comes out ahead, the break-even year and the home-price growth needed; check the year-by-year table and download it.
Examples
20% down · 8.5% for 20 years · 7% stamp duty · ₹3,000 a month upkeep + ₹12,000 a year tax and insurance, rising 5% · home grows 5% · 1% selling cost · rent rises 5% · ₹50,000 deposit · 9% return
Net worth if you buy ₹2,10,14,118 · if you rent ₹2,80,10,568 — renting ahead by ₹69,96,450. The two end level if the home gains 6.52% a year.
The EMI is ₹55,541; owning costs ₹59,541 in the first month against ₹25,000 of rent, and the renter invests the difference.
Buying pulls ahead in year 4 and ends ₹89,04,213 ahead.
₹1,09,200 a year saved while the interest is above ₹2 lakh and the principal above ₹1.5 lakh — renting still ahead, by ₹15,57,379; the break-even growth falls to 5.38% a year.
Buying pulls ahead in year 19.
Common uses
- Decide whether to buy now or keep renting and investing.
- See how many years you need to stay for buying to make sense.
- Check how sensitive the answer is to home-price growth and investment returns.
- Put a value on the old-regime tax benefits of a home loan.
How the comparison works
Both choices start with the same money and spend the same each month; whatever one of them does not spend is invested.
- Up front: the buyer pays the down payment, stamp duty and registration and other costs; the renter pays the deposit and invests the rest.
- Every month: the buyer pays the EMI, maintenance and a twelfth of the property tax and insurance; the renter pays the rent. Whoever pays less invests the difference that month.
- Net worth if you buy = home value × (1 − cost of selling) − loan still owed + investments.
- Net worth if you rent = investments + the deposit, which is refundable.
The EMI is L × r(1 + r)^n ÷ ((1 + r)^n − 1) with r the annual rate ÷ 12. Investments compound monthly at the yearly return you enter; rent, upkeep and the home’s value change once a year.
Tax benefits on a home loan (old regime)
Under the Income-tax Act, 2025, for a home you live in:
- Interest: deducted from income from house property up to ₹2,00,000 a year in total, if the home is bought or built within five years from the end of the tax year in which the loan was taken (and you have the lender’s certificate); otherwise up to ₹30,000 (section 22(1)(b), 22(2) and 22(5)).
- Principal and stamp duty: repayment of the home loan to a bank, housing finance company and similar lenders, and the stamp duty, registration fee and other transfer expenses, count towards the ₹1,50,000 limit of section 123 (Schedule XV, paragraphs 1(r) and 3). If you sell the home within five years from the end of the tax year you got possession, those deductions are added back to your income (Schedule XV, paragraph 4).
- New regime: the default tax regime (section 202) allows neither — no interest deduction for a self-occupied home (section 202(2)(a)(v)) and none of the Chapter VIII deductions such as section 123 (section 202(2)(a)(xii)).
The calculator estimates the saving as your marginal tax rate × the deductions each year. A renter in the old regime may save tax through the HRA exemption instead; enter that saving too, so both sides are treated alike. Source: Income-tax Act, 2025.
What usually decides it
- Home-price growth against your investment return. The buyer’s money is mostly in the home; the renter’s is in investments. The break-even growth shown under the result is the yearly home-price growth at which the two end level for your other inputs.
- Rent against the price. The price-to-rent ratio (price ÷ a year’s rent) and the rental yield (a year’s rent ÷ price) show how expensive buying is compared with renting the same home. At ₹80 lakh and ₹25,000 a month the ratio is 26.7 and the yield 3.75%.
- How long you stay. Stamp duty and selling costs are paid once, so a short stay favours renting.
- The loan rate. A higher rate means a bigger EMI, and more of it is interest.
Limitations
- Tax on gains is not included: neither capital-gains tax when you sell the home nor tax on the investments’ returns.
- Interest rates, returns, rent rises and price growth are the same every year; real ones vary. Try a few values for each.
- Tax benefits are estimated at one marginal rate and counted per year of the loan, not per April–March tax year; the interest limit falls to ₹30,000 if the home is not finished within five years of the end of the tax year of the loan.
- Under-construction homes (pre-EMI interest, rent paid meanwhile), prepayments, loan processing fees and changes in your situation are not modelled — add one-time costs under other buying costs.
- A home is also a place to live with security of tenure; renting gives flexibility. Neither is a number here.
Privacy
Everything is calculated in your browser. Nothing you enter is uploaded or stored.
Frequently asked questions
Is it better to rent or buy a house in India?
It depends on the price compared with the rent, how fast you expect prices to rise, what your investments would earn and how long you will stay. In the example — an ₹80 lakh home or ₹25,000 rent, 5% price growth and a 9% return — renting and investing ends ahead after 20 years, and buying would need about 6.5% a year price growth to match it. Change the numbers to yours.
What is the break-even year?
The first year from which your net worth is higher if you buy than if you rent, and stays higher to the end of the period. If buying never catches up, renting stays ahead for the whole period.
What is a good price-to-rent ratio?
There is no single threshold. A higher ratio means the home is expensive compared with its rent, so buying needs more price growth to pay off; a lower one makes buying easier to justify. The calculator turns the ratio into the price growth you would actually need.
Can I claim tax benefits on a home loan in the new regime?
Not for the home you live in. The new regime (the default under section 202 of the Income-tax Act, 2025) allows no deduction for its interest and no section 123 deduction for the principal. Only if you opt for the old regime can you deduct interest up to ₹2,00,000 and principal within ₹1,50,000.
Should I include stamp duty and selling costs?
Yes — they are real costs of buying. Stamp duty and registration are paid once when you buy, at rates set by your state (work yours out with the stamp duty calculator), and selling usually costs brokerage. Leaving them out makes buying look better than it is, especially over short periods.
What return should I assume on investments?
What you would really earn on the money, after costs, if you did not buy: a mix of equity funds and deposits earns something between the two. Try the comparison at a few returns — the answer often changes with it.