Rent vs Buy Calculator
Compare the true cost of renting versus buying a home over time. Factor in mortgage, property tax, appreciation and investment returns.
🏠 Buy Scenario
🏢 Rent Scenario
📊 Analysis Settings
Break-even year
Never
Recommendation
Rent
Analysis Summary
Renting remains financially better over the 15-year analysis period. Consider your non-financial preferences like stability and customization.
Year-by-Year Comparison
| Year | Buy Equity | Buy Net | Rent Investment | Rent Net | Winner |
|---|---|---|---|---|---|
| Year 1 | ₹13,29,609 | ₹-65,862 | ₹12,76,555 | ₹12,76,555 | 🏢 Rent |
| Year 2 | ₹16,78,755 | ₹-1,14,299 | ₹15,68,766 | ₹15,68,766 | 🏢 Rent |
| Year 3 | ₹20,48,685 | ₹-1,44,249 | ₹18,77,598 | ₹18,77,598 | 🏢 Rent |
| Year 4 | ₹24,40,731 | ₹-1,54,583 | ₹22,04,082 | ₹22,04,082 | 🏢 Rent |
| Year 5 | ₹28,56,320 | ₹-1,44,096 | ₹25,49,324 | ₹25,49,324 | 🏢 Rent |
| Year 6 | ₹32,96,978 | ₹-1,11,504 | ₹29,14,504 | ₹29,14,504 | 🏢 Rent |
| Year 7 | ₹37,64,336 | ₹-55,434 | ₹33,00,887 | ₹33,00,887 | 🏢 Rent |
| Year 8 | ₹42,60,143 | ₹25,574 | ₹37,09,827 | ₹37,09,827 | 🏢 Rent |
| Year 9 | ₹47,86,269 | ₹1,33,083 | ₹41,42,775 | ₹41,42,775 | 🏢 Rent |
| Year 10 | ₹53,44,720 | ₹2,68,760 | ₹46,01,289 | ₹46,01,289 | 🏢 Rent |
| Year 11 | ₹59,37,644 | ₹4,34,385 | ₹50,87,039 | ₹50,87,039 | 🏢 Rent |
| Year 12 | ₹65,67,343 | ₹6,31,861 | ₹56,01,816 | ₹56,01,816 | 🏢 Rent |
| Year 13 | ₹72,36,287 | ₹8,63,222 | ₹61,47,547 | ₹61,47,547 | 🏢 Rent |
| Year 14 | ₹79,47,122 | ₹11,30,643 | ₹67,26,301 | ₹67,26,301 | 🏢 Rent |
| Year 15 | ₹87,02,692 | ₹14,36,447 | ₹73,40,303 | ₹73,40,303 | 🏢 Rent |
Last updated: March 2026
How this calculator is verified
Checked by True Calculator automated test suite on
- Formula verified against a published worked example in the automated test suite
- Edge cases (zero, negative, boundary and unit-mismatch inputs) covered by unit tests
The full verification method is on our how we verify page. Found an error? Tell us and we will re-check it.
When to Use This Calculator
This is the decision tool for the biggest financial question Indian households face: is it better to keep renting or take the plunge into a home purchase? The calculator goes beyond the simple EMI-versus-rent comparison that most people stop at — it includes property tax, maintenance, appreciation, the mortgage rate, the rent's yearly escalation, and the return the down payment could earn if invested instead. The break-even year is the key output: if you plan to stay in the city longer than the break-even, buying usually wins; if not, renting often does. Families transferring cities, couples deciding between a flat purchase and a larger portfolio, and anyone comparing a ₹70 lakh flat against a ₹22,000 rent should run both scenarios.
How to Use This Calculator
- Step 1: Enter the buy-side inputs — home price, down payment percentage, mortgage rate and term.
- Step 2: Enter property tax rate, annual insurance, maintenance rate and the home appreciation rate you assume.
- Step 3: Enter the rent-side inputs — monthly rent, annual rent increase, and the investment return rate the down payment could earn.
- Step 4: Set the analysis period and marginal tax rate, then read the break-even year and the year-by-year comparison.
Worked Example
Compare a ₹70,00,000 home bought with 20% down at 8.5% over 20 years against ₹22,000 monthly rent rising 5% a year, over a 10-year window with 5% home appreciation and 9% returns on invested funds. In this run the tool reports no break-even year — renting stays ahead for all 10 years — because the rent scenario invests the down payment and the monthly gap between mortgage and rent. Re-run with a longer stay horizon to find the crossover.
Tips and Common Mistakes
- •Tip 1: Stamp duty and registration (usually 5-8% of the value by state) are outside the calculator's inputs — subtract them from the buying side yourself.
- •Tip 2: The break-even year is the key output: if it exceeds how long you plan to stay, renting usually wins financially.
- •Tip 3: Set the marginal tax rate honestly — the home-loan interest deduction under Section 24(b), up to ₹2 lakh a year for a self-occupied home, lowers the effective mortgage cost.
- ✗Mistake 1: Comparing the EMI against the rent directly — the tool includes taxes, insurance, maintenance and the foregone investment return.
- ✗Mistake 2: Projecting the recent price boom as the appreciation rate; the appreciation input you enter drives the result.
Frequently Asked Questions
Is buying always better than renting?
No. Renting can be better if you move frequently, live in a high-cost area, or can invest the down payment at higher returns.
What costs should I consider when buying?
Beyond mortgage: property tax, insurance, maintenance (1-2% annually), closing costs, and opportunity cost of down payment.
What is the break-even point?
The year when buying becomes financially better than renting. Typically 5-7 years to recoup transaction costs.
How does home loan interest tax benefit work in India?
Under section 24(b) of the Income Tax Act you can claim up to ₹2,00,000 a year on home loan interest for a self-occupied property, and the principal repaid qualifies under 80C. This calculator shows both the break-even and the after-tax comparison.
How do Indian property taxes affect the comparison?
Many Indian cities charge annual property tax on owned homes, and home loan interest offers tax benefits under section 24(b). Both are factored in — property tax adds to the buying cost, while the tax deduction reduces it.
Compare these tools
- Future Value Calculator — Find what your money grows into with compound interest at any frequency
- Gratuity Calculator (India) — Calculate gratuity under the Payment of Gratuity Act, 1972 with the 15/26 formula and the ₹20 lakh tax-exempt cap for Indian employees
- GST Calculator (India) — Add or remove GST from any amount, with CGST + SGST split for intra-state and IGST for inter-state supplies
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