Rent vs Buy Calculator
Should you rent or buy a home? See which leaves you richer
Reviewed by the PaisaTools Editorial Team · Last reviewed September 2026
How to use: Enter the home price, your rent, loan terms and how long you'll stay — we run a net-worth comparison and tell you whether to rent or buy, with the break-even year.
Example₹80 lakh home, ₹25,000 rent, staying 10 years → see whether buying or renting-and-investing leaves you richer
The all-in price of the home you'd buy
The rest is your home loan
Typical home-loan rates are around 8–9%
What you'd pay to rent the same kind of home today
The single biggest factor — the longer you stay, the more buying wins
How much the property's value rises each year
What you'd earn investing the money instead (e.g. index funds ~11–12%)
Renting wins by ₹24,35,708
Over 10 years, renting & investing the difference leaves you about ₹24,35,708 richer.
“Renting wins” assumes you invest the money you didn't spend on a down payment and EMI. If you'd just spend it instead, buying is the safer way to build wealth.
₹1,10,21,548
₹1,34,57,256
✓ Better outcome
Net worth after 10 years — home equity plus any money you invested along the way.
The numbers behind it
The break-even point is the real answer: if you'll stay longer than that, buy; shorter, rent and invest the difference.
Check how much home loan your salary supports“Should I rent or buy?” is one of the biggest money decisions you'll make — and the usual advice (“rent is wasted money”) is too simple. This calculator settles it with a year-by-year net-worth race: it puts a buyer and a renter on the same starting wallet and follows both forward.
The buyer sinks the down payment and buying costs into a home and pays an EMI; the renter invests that same cash and pays rent. Each month, whoever spends less invests the difference. At the end of the period you'd actually stay, it compares net worth — home equity for the buyer versus an invested portfolio for the renter — and declares a winner, plus the break-even year where buying pulls ahead.
The takeaway is almost always about time horizon: if you'll stay longer than the break-even, buy; if shorter, rent and invest the gap. Once you have your answer, check how much loan your salary supports with the home loan eligibility calculator and the exact EMI with the EMI calculator.
The comparison runs a monthly simulation: the buyer's equity grows as the loan amortises (standard EMI formula) and the home appreciates, while both parties invest any monthly cash-flow surplus at the expected investment return. Fixed assumptions — rent inflation 7%/yr, owning cost (maintenance + property tax) 1%/yr of value, buying cost 7% upfront, selling cost 1.5% — reflect typical Indian market norms and can be refined as your situation differs. Income-tax benefits on home-loan interest and principal are excluded, making the result conservative toward buying. This is an educational model, not financial advice.
- Very sensitive to assumed home appreciation and investment return.
- Ignores transaction costs, maintenance variance and lifestyle factors.
- Is it better to rent or buy a home in India?
- It depends almost entirely on how long you'll stay. Buying carries big upfront costs (down payment plus ~7% stamp duty and registration), so it takes years for the equity you build to overtake what you'd earn by renting and investing the difference. Stay past the break-even point this calculator shows and buying wins; leave sooner and renting comes out ahead. There's no universal answer — only the answer for your numbers.
- Why does renting ever beat buying if rent is 'money down the drain'?
- Because an EMI isn't all equity either — in the early years most of it is interest, also 'down the drain'. The honest comparison credits the renter for investing the money they didn't sink into a down payment, buying costs and the gap between EMI and rent. If those investments grow faster than the home appreciates, renting can leave you with more net worth — especially over shorter horizons.
- What is the break-even point?
- It's the number of years at which a buyer's net worth (home equity plus side investments) overtakes a renter's invested portfolio. Before it, renting-and-investing is ahead; after it, buying is. It's the single most useful number here, because your real decision is simply: 'Will I stay longer than the break-even?'
- Which inputs change the answer the most?
- Three: how long you'll stay (longer favours buying), home appreciation vs investment return (whichever grows faster wins), and the gap between rent and EMI. Stamp duty and the down payment create the early hole that buying has to climb out of, which is why short stays usually favour renting.
- What assumptions does it make?
- Rent rises 7%/year, owning costs (maintenance + property tax) are 1%/year of the home's value, buying costs (stamp duty + registration) are 7% upfront, and selling costs are 1.5% at exit. You set the home price, rent, loan terms, how long you'll stay, expected appreciation and investment return. It does not model income-tax benefits on home-loan interest, which can tilt things further toward buying.
- Does it include the tax benefit on a home loan?
- Not yet — the comparison is deliberately conservative and leaves out the Section 24(b) (section 22 of the new Income-tax Act, 2025) interest deduction (up to ₹2 lakh) and 80C (section 123 of the new Income-tax Act, 2025) principal benefit, which make buying somewhat more attractive than shown. Treat the result as the 'before tax-break' picture; if buying is already ahead or close, tax benefits only strengthen that.
Related guides
- Rent vs buy in India: when buying a home actually winsBuying isn't always smarter, and renting isn't throwing money away. It turns on one number: how long you stay, and what the difference earns.
- How much home loan can you get on your salary?Banks lend against your income, not the house. The simple rule (FOIR) that decides your loan size — with a salary-to-loan table.
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