Buy vs Rent Calculator
Compare the true cost of buying against renting and investing the difference, over any horizon, with Indian appreciation and rent-inflation assumptions.
The honest comparison is not "EMI versus rent". Buying costs you interest, stamp duty, maintenance and property tax, and returns you the property's appreciation. Renting costs you rent — but frees the down payment to be invested elsewhere.
This calculator runs both paths over your horizon and reports which leaves you wealthier. The result is highly sensitive to two assumptions: how fast property appreciates, and what your investments would otherwise earn.
How the comparison works
If you buy: you pay the down payment and stamp duty up front, then the EMI plus roughly 1% of value a year in maintenance and property tax. At the end you own a property worth the original price compounded at your appreciation assumption, less any outstanding loan.
If you rent: you pay rent, rising each year with rent inflation. The down payment and stamp duty you did not spend are invested from day one, and each month the difference between ownership cost and rent is invested too. At the end you hold that portfolio.
What actually decides it
- Appreciation versus investment return. If property grows 6% and your portfolio grows 11%, renting is often ahead — but the buyer is leveraged, and 6% on the full property value with only 20% down is a much larger absolute gain than 6% on the deposit.
- How long you stay. Stamp duty, registration and brokerage cost roughly 8–10% up front and are recovered only over time. Below five years buying rarely wins.
- The rent-to-price ratio. Where annual rent is under 3% of price — most Indian metros — renting is cheap relative to owning, and the case for buying rests on appreciation.
Every projection here depends on assumptions nobody can guarantee. Treat the output as a way to test how sensitive the decision is, not a forecast. The non-financial side — security of tenure, freedom to renovate, or the flexibility to move for work — is often the deciding factor and cannot be modelled.
Worked example
A ₹80 lakh flat with 20% down means a ₹64 lakh loan and an EMI near ₹55,500 at 8.5% over 20 years. The same flat might rent for ₹22,000 a month. Renting costs ₹33,500 less each month — but that gap, invested at 11% for 20 years alongside the ₹16 lakh down payment, is what buying has to beat in appreciation.
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Create your free property pageFrequently asked questions
Is it better to buy or rent in India?
Financially it depends on how long you stay and whether property outpaces your alternative investments. Under five years, transaction costs of 8–10% usually make renting better. Over ten years in an appreciating market, leverage generally favours buying.
Does the calculator include tax benefits?
No, deliberately — Section 24 and 80C relief depend on your slab, whether you use the new or old regime, and whether the property is self-occupied. They tilt the result modestly towards buying.
What appreciation rate should I assume?
Indian residential property has broadly tracked 5–7% a year over long periods, with wide variation by city and micro-market. Assuming double digits is how people talk themselves into bad purchases.
Why is rent inflation included?
Because rent is not fixed. Most Indian leases raise rent 5–10% a year, so the rental path gets steadily more expensive while an EMI on a fixed component does not.
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