How to use this rent vs buy calculator
- Property price and Down payment (own contribution): the loan is the difference.
- Home loan rate and Loan tenure: the rate you have been quoted and the years you would repay over.
- Monthly rent: the rent on a similar flat in the same area. Comparing a 1 BHK with a 3 BHK will skew the answer.
- Years to compare: how long you expect to stay.
- Open "More options" to change Stamp duty, registration & fees, Selling costs, Society maintenance, property tax & upkeep, Property price growth, Rent growth and the Investment return the renter earns.
The result shows which choice leaves you better off after your chosen number of years, and by how much. It also gives your net worth each way, the break-even year, the total spent on buying and on rent, and a year-by-year table.
How the comparison works
Both households start with the same money. The buyer spends the down payment and stamp duty, then pays EMIs and running costs each month. The renter invests the money the buyer spent upfront and, every month that owning costs more than renting, invests the difference too. If owning becomes cheaper than rent, the owner invests the gap instead.
Net worth if you buy = property value − loan outstanding − selling costs + any investmentsNet worth if you rent = (down payment + stamp duty & fees) invested + each month’s (owning cost − rent) invested Worked example
A flat costs ₹75 lakh. You would put down ₹15 lakh and borrow ₹60 lakh at 8.5% over 20 years. A similar flat rents for ₹20,000 a month. Stamp duty, registration and fees at 7% come to ₹5.25 lakh, and you compare over 10 years.
- In year 1, owning costs about ₹58,319 a month: a ₹52,069 EMI plus ₹6,250 of maintenance, property tax and upkeep.
- The renter invests ₹20,25,000 at the start and the ₹38,319 a month that renting saves in year 1.
- After 10 years at 5% price growth, the flat is worth ₹1,22,16,710 and ₹41,99,629 of the loan is left. After 2% selling costs, the buyer’s net worth is ₹77,72,746.
- The renter’s investments, at 8% a year, are worth ₹1,07,60,964.
Renting comes out ahead by ₹29,88,218. For buying to win over these 10 years, property prices would need to grow faster than 7.5% a year.
What tips the balance
The biggest factor is the rent compared with the price. The same ₹75 lakh flat over 10 years, with everything else as in the example:
| Monthly rent | Gross rental yield | After 10 years | Break-even |
|---|---|---|---|
| ₹20,000 | 3.2% | Renting ahead by ₹29,88,218 | Not within 40 years |
| ₹30,000 | 4.8% | Renting ahead by ₹7,91,439 | Year 20 |
| ₹40,000 | 6.4% | Buying ahead by ₹14,05,340 | Year 5 |
Next comes price growth. At ₹20,000 rent:
| Property price growth | After 10 years |
|---|---|
| 3% a year | Renting ahead by ₹49,62,869 |
| 5% a year | Renting ahead by ₹29,88,218 |
| 7% a year | Renting ahead by ₹6,35,168 |
| 8% a year | Buying ahead by ₹7,02,400 |
| 9% a year | Buying ahead by ₹21,58,600 |
The renter’s investment return matters as well. At 6% instead of 8%, renting’s lead shrinks to ₹15,96,716; at 10% it grows to ₹45,92,712. Use a return you can realistically earn after tax and fees. The compound interest calculator shows how a monthly SIP of the difference could grow.
Indian costs of buying a home
The largest one-off cost is stamp duty and registration, which each state sets: stamp duty is typically about 5–7% of the property value plus about 1% for registration, and some states offer concessions for women buyers. The 7% default is a mid-range example, so adjust it for your state and add the loan processing fee and legal charges.
The running costs are society maintenance, paid monthly, and property tax to the municipality, paid yearly, plus insurance and repairs. The 1% default works out to ₹6,250 a month in year 1 on a ₹75 lakh flat. There is no HOA or PMI to add. Banks commonly lend up to 80% of the value on a loan of ₹30–75 lakh, so the ₹60 lakh loan in the example is the most a ₹15 lakh down payment allows; the calculator warns you if your loan goes above the RBI cap. Check what your income supports with the home loan eligibility calculator.
What the calculator leaves out
It does not estimate tax. Under the old tax regime, interest on a self-occupied home loan may be deductible up to ₹2 lakh a year, and principal repayment counts towards the ₹1.5 lakh yearly deduction limit, which would help the buyer. The rules differ under the new regime. It also cannot price the security of owning or the freedom of renting. If you are weighing a flat as an investment rather than a home, the rental yield calculator shows what it would earn, and the home loan EMI calculator breaks down the EMI year by year.
Frequently asked questions
Is it better to rent or buy a house in India?
Why is renting often cheaper than buying in Indian cities?
How long do I need to stay for buying to make sense?
How fast do property prices need to rise for buying to win?
Does the calculator include stamp duty and society maintenance?
Are home loan tax benefits included?
Sources and further reading
Independent, official guidance on this topic. Rules differ by country, so check the regulator where you live.
- Reserve Bank of India: regulations, notifications and consumer awareness · Reserve Bank of India
This calculator gives estimates for education and planning. It is not financial advice, and your lender's figures may differ. See how we calculate.