Rent vs Buy a Home Calculator
Two households with the same money, one buying and one renting and investing the difference, compared after the years you choose.
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After 10 years, renting and investing the difference ends ₹33,26,404 ahead on these assumptions.
- What the buyer owns₹85,51,552
- What the renter owns₹1,18,77,956
- EMI₹55,541
- Loan still owed at the end₹44,79,605
How this is worked out
- Both start with the same cash: the buyer pays the down payment and buying costs; the renter invests that amount.
- Each month whoever pays less (EMI + upkeep against rent) invests the difference at the assumed return.
- What the buyer owns = home value − loan still owed + investments. What the renter owns = investments.
Assumptions
- Home prices, rents and returns are assumptions; small changes to them can swing the answer, so try a few.
- Selling costs, tax benefits on home loans and capital gains tax are left out. Owning also brings security of tenure, which no number captures.
The formula
What the buyer owns = home value − loan still owed + investments
What the renter owns = investments
- Investments: the renter invests the down payment and buying costs; each month whoever pays less invests the difference
Both households start with the same cash and pay the same each month, so the comparison is fair.
A worked example
A ₹80,00,000 home with 20% down against ₹25,000 rent: after 10 years the buyer is worth about ₹85,51,552 and the renter about ₹1,18,77,956 on these assumptions.
Questions people ask
Is it better to rent or buy a home in India?
It depends on the price-to-rent ratio in your city, how long you will stay, how fast prices and rents rise, and what your money would earn elsewhere. Where homes cost a great many years of rent, renting and investing the difference often ends ahead over ten years; the calculator shows it at your figures.
What costs does buying add beyond the EMI?
Stamp duty and registration, usually 5 to 8% of the price depending on the state, interiors, society charges and upkeep, and the loan interest itself. Selling later adds brokerage too.
Why do small changes swing the answer?
Home price growth and investment returns compound over many years, so a one-point change in either moves the result a lot. Try a cautious and a hopeful set of assumptions and see whether the answer holds.
From the Savingy Guide
Related calculators
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- Loan EMI Calculator: Calculate your loan EMI, total interest and total repayment for home, car or personal loans. Free EMI calculator with instant results.
- HRA Exemption Calculator: Work out how much of your house rent allowance is tax-free under the old regime: the least of three limits, with the 2026-27 list of 50% cities.
Sources
Estimates are for illustration only and assume constant returns. Actual returns vary with market conditions. This is not investment advice.