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Rent vs Buy Calculator

Compare the true long-term cost of renting versus buying - including EMI, down payment opportunity cost, property appreciation, and rent inflation.

Property & Loan Details
Return if down payment was invested instead
Decision Guide

Rent vs Buy - Key Factors

Property Appreciation

Long-term Indian residential property appreciates 5–8% p.a. in metros. This capital gain is the biggest argument for buying - but it only materializes if you hold for 10+ years.

Opportunity Cost

Your down payment, invested in index funds at 12% p.a., can grow significantly. If property appreciation is slower than your investment return, renting + investing may build more wealth.

Break-Even Year

The year when buying's cumulative cost (EMI + opportunity cost − property value) equals renting's total rent paid. In most metros, this falls between year 8 and year 15.

FAQ

Frequently Asked Questions

In most Indian metros, buying becomes financially better after 8–15 years, depending on property appreciation rate, interest rates, and rent inflation. The break-even year is when total cost of buying (EMIs + down payment opportunity cost) equals total cost of renting. High appreciation markets like Mumbai break even faster.

If you invest ₹20L as a down payment, you forgo the return it would have earned - e.g., 12% p.a. in equity mutual funds turns ₹20L into ₹1.93 crore in 20 years. This opportunity cost must be weighed against property appreciation. The calculator compares both scenarios year by year.

Not always. Renting is almost always cheaper in the first 5 years due to high EMI interest. In the long term (15+ years), buying typically wins due to property appreciation and rising rents. The result depends heavily on local appreciation rates and your alternative investment return assumption.

Rental yield = (annual rent / property price) × 100. Mumbai and Bengaluru average 2–3%; smaller cities offer 3–5%. If rental yield is below your loan interest rate, renting is cheaper in early years. Use this as a quick filter - if yield < loan rate, the break-even will take longer.

Yes - Section 24(b) allows ₹2L/year deduction on home loan interest (self-occupied); Section 80C allows ₹1.5L deduction on principal. In the 30% tax bracket, this saves up to ₹1.05–1.5L/year - effectively reducing your EMI burden. Subtract these savings from buying's total cost for a more accurate comparison.