Compare buying a home with renting a similar one and investing the money you keep. Use your own prices and costs. The result is a scenario, not a verdict on where you should live.
Change the investment assumption
All other inputs stay the same. This tests the outcome at your chosen horizon.
| Annual return | Wealth advantage |
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See each year and the remaining loan
| Year | Buyer wealth | Renter wealth | Loan left |
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Example inputs are illustrative, not current market quotes. Nothing you enter is submitted by this calculator or saved by it.
What the comparison includes
Both choices start with the same cash. The buyer uses it for the down payment and upfront costs. The renter invests that entire amount on day one. The buyer’s home equity is the estimated sale value, less selling costs and the outstanding mortgage.
Each month, the model compares rent with EMI plus upkeep. When buying costs more, the renter invests the percentage of the saving you choose and spends the rest. When renting costs more, the buyer invests the full difference. This includes the years after the loan ends. Both investment balances use the same return assumption.
The comparison assumes a household can afford the more expensive option each month. It does not test whether the EMI fits your income. Use the home loan down payment calculator to check your upfront requirement, and the home loan repayment calculator to explore extra payments.
The number to be honest about
Try reducing “Renter invests monthly saving” from 100% to 50%. A rent-versus-buy calculation only gives the renter the benefit of investing money that actually gets invested. An EMI creates a repayment obligation; a cheaper rent bill does not automatically create an investment.
Our article Rent or Buy, and the Number That Decides It explains rental yield and this saving habit. This tool lets you replace the worked example with your own assumptions.
How the maths works
Loan interest is applied monthly at the annual loan rate divided by 12. The EMI is fixed, and repayments reduce principal after interest. A zero-interest loan divides principal equally across its term. Investment returns and home appreciation are effective annual rates converted to monthly growth. Monthly investments happen at month-end. Rent and upkeep change once a year; upkeep is a percentage of the home value at the beginning of that year.
“Buying first catches up” means the first annual checkpoint where buyer wealth is at least renter wealth. It is not a permanent break-even promise. The annual table can show later reversals, and the sensitivity table shows how changing the investment return changes the final comparison.
What the result leaves out
Tax benefits, capital gains tax, rental deposits, moving costs, furnishing, construction delays and changing loan rates are excluded. Add purchase-related costs you expect to the upfront cost input. The investment return should be after investment fees but before personal tax. All figures are future rupees, without inflation adjustment.
The buyer’s result includes a home that must be sold to realise its equity. The renter’s result is an investment portfolio whose value can also fall. Housing stability, schools, flexibility and the ability to change your home matter even when they cannot be priced here.
This calculator is for education, not personal financial advice. Property prices and investment returns are uncertain. A smooth assumed growth rate does not model market falls or every cost of owning a home. For advice about your circumstances, speak to a SEBI-registered investment adviser and an appropriate tax professional.