Rent vs Buy Calculator India
Unbiased year-by-year financial analysis comparing homeownership equity against mutual fund SIP investing.
- Runs in your browser
- Free, no signup
Home Purchase & Loan Parameters
Renting Parameters
Investment & Time Horizon
Calculating decision...
Year-by-Year Financial Projection
| Year | Property Value | Buyer Net Worth | Renter Portfolio | Buyer Outflow | Renter Outflow | Net Advantage |
|---|
Your property, rent, and portfolio calculations are performed 100% in your browser without transmitting any financial data.
The decision to buy a home versus renting is one of the biggest financial questions in Indian personal finance. Traditional intuition favors buying because "rent is money thrown away", while financial analysts often argue that the high upfront costs (down payment, 5–7% stamp duty, loan interest, society maintenance) can generate higher wealth if invested in equity mutual funds.
This calculator conducts an exhaustive, unbiased year-by-year simulation. It compares the home buyer's net equity (appreciated property minus outstanding loan and selling costs) against the renter's investment portfolio (initial capital invested plus monthly cash-flow savings compounded at your chosen return rate).
How to use this tool
- Enter the property price, down payment percentage, home loan interest rate, stamp duty, and expected property appreciation rate.
- Enter the current monthly rent, annual rent inflation (typically 5–8%), and tenant maintenance charges.
- Set your expected equity mutual fund / portfolio return rate (typically 10–12%) and your analysis horizon (e.g. 10, 15, or 20 years).
- Review the Decision Verdict, Break-even Horizon, and download the complete year-by-year projection as CSV.
Understanding the Opportunity Cost of Homeownership
When you buy a ₹60 Lakh home, you spend ₹12 Lakh on down payment and ₹3.6 Lakh on stamp duty and registration upfront. The renter instead invests that ₹15.6 Lakh in an equity mutual fund compounding at 11–12% per year.
Furthermore, monthly home loan EMI and maintenance typically exceed monthly rent for the first 7–10 years. The renter invests this monthly surplus into a SIP. Renting wins when investment compounding outpaces real estate capital appreciation.
When Does Buying Beat Renting?
Buying wins over longer horizons (typically 12–20+ years) when rent inflation compounds aggressively, or when real estate appreciation in high-growth corridors exceeds 7–8% p.a.
Additionally, once the 20-year home loan is paid off, the homeowner lives virtually rent-free, whereas the renter must continue paying escalating rents into retirement.
Frequently asked questions
What is a typical break-even horizon in Indian metro cities?
In tier-1 Indian metros (Mumbai, Bengaluru, Delhi-NCR) where rental yields are low (2.5% to 3.5%) and property prices are high, break-even typically ranges between 10 and 16 years, depending on stock market vs real estate returns.
Does this calculator account for selling costs when exiting property?
Yes. A standard 2% deduction is applied to the final property value to account for brokerage, documentation, and transfer fees upon sale.
Is emotional peace of mind factored in?
This calculator models the pure mathematics and net financial wealth. Emotional factors like pride of ownership or landlord freedom are personal values that complement the numbers.