Rent vs Buy Calculator
"Rent is money down the drain" is the most expensive piece of folk wisdom in personal finance. In the early years of a home loan, most of your EMI is interest — which is also money down the drain, usually a larger amount than the rent would have been.
The honest comparison is not rent versus EMI. It is: where does each path leave your net worth after N years? Buying gives you an appreciating asset minus the loan and everything spent on interest, taxes and maintenance. Renting gives you a portfolio built from the down payment plus every month the rent came in below the true cost of owning. This calculator runs both, month by month, and tells you which one wins on your numbers.
Over 10 years, renting and investing the difference leaves you roughly 4,262,212 better off. Change the appreciation rate to see how sensitive that is.
How it works
- 01The buying path tracks property value appreciating, loan balance falling, and the running cost of interest, maintenance and property tax — roughly 1.5% of value per year.
- 02The renting path invests the down payment immediately, then invests the monthly difference whenever ownership costs more than rent. Rent rises each year at the rate you set.
- 03The verdict compares final net worth: property value minus outstanding loan on one side, portfolio value on the other.
Frequently asked
Why does renting often win over shorter periods?+
Because buying front-loads its costs — stamp duty, registration, brokerage and years of interest-heavy EMIs — while appreciation compounds slowly. Under roughly seven years, renting usually wins on the numbers. Beyond ten, buying pulls ahead as the loan shrinks and the asset grows.
Does this include stamp duty and registration?+
Not separately — they are one-off costs of 6–8% of the property price in most Indian states. Fold them into the price, or treat the buying result as slightly optimistic.
What about the security of owning?+
Real, and not in the model. Owning means no landlord, no forced relocation, and a place you can modify. Those are worth paying for — this calculator just tells you how much you are paying, so it is a choice rather than an assumption.
The result flips when I change appreciation. Which figure is right?+
That sensitivity is the honest answer: the outcome hinges on a number nobody can predict. Run it at 4%, 6% and 8% and see whether your decision changes. If buying only wins at 10% appreciation, you are betting, not planning.
Does renting mean I am wasting money?+
Only if you spend the difference. Renting wins in the model because the money not spent on ownership goes into the market. Rent cheaply and spend the surplus, and buying would have been better — a forced-savings mechanism beats an unused one.