Finance · Free tool
Rent vs Buy Calculator
The classic question — is your rent "wasted"? Depends on appreciation, opportunity cost on down payment and your time horizon. We compute the net cost of both paths.
If you invest down payment instead.
Buy
Rent
Buy wins by ₹40,50,397 over 10 years.
How the comparison works
We project two parallel paths over your horizon. Buy: down payment + 20-year EMI + maintenance + property tax + stamp duty / registration, with the property appreciating at your assumed rate. Rent: annual rent (escalating at ~7%/yr) plus the down payment invested at the equity opportunity-cost rate. At each year we compare net worth: house equity minus loan outstanding minus all carry costs, vs the renter's growing investment corpus.
Worked example
A ₹1.2 crore 2BHK in Bengaluru: 20% down (₹24L), 20-year loan at 8.5%, EMI ₹83,400. Stamp duty + registration in Karnataka adds ~7% upfront (₹8.4L). Maintenance + property tax = ~₹35k/yr. Compare with renting the same flat at ₹38k/month (rent yield is just 3.8% in metros) and investing the ₹32L upfront + the EMI minus rent gap into an index fund at 12% CAGR. Break-even typically lands at year 10–13 in Bengaluru / Hyderabad, year 7–9 in Delhi NCR, and rarely before year 15 in Mumbai where price-to-rent ratios are 35x+.
When to use this
- Deciding between a Bengaluru flat purchase and renting + SIP-ing the down payment
- Evaluating a transfer city — if you might leave in 5 years, buying rarely wins
- Stress-testing the buy case with a slower 4% appreciation (most metros 2018–2023)
For the underlying EMI math see the EMI Calculator, and check stamp duty by state — it can swing the break-even by 2–3 years.
FAQ
When does buying definitively beat renting?
Beyond 7-10 years horizon, with property appreciation ≥ rent escalation, when down payment doesn't crowd out emergency fund. In metros with 30+ price-to-rent ratio, the case is weaker.
Is rent really "dead money"?
No — it's the cost of optionality and zero capital lock-up. The down payment if invested at 11-12% can outpace property appreciation in stagnant markets.
What about emotional value of owning?
Real and not captured in this calculator. Stability, customisation, neighbourhood ties matter beyond IRR. The right answer for many is buy when financially close to break-even.