Smart Money · Simple Words · India
Compare the true cost of buying a home vs renting + investing the difference over 10–30 years. Factor in EMI, down payment opportunity cost, property appreciation, rent escalation, maintenance and more.
This calculator compares two scenarios over the same time period:
The calculator then compares your net wealth in both scenarios. Buying net wealth = property value. Renting net wealth = investment corpus. The higher number wins financially.
It depends on the city, property price-to-rent ratio, loan rate, and how long you plan to stay. In high price-to-rent cities like Mumbai (ratio 30–40x), renting + investing often wins. In affordable cities (ratio below 15x), buying can be better. Use this calculator with your real numbers.
Price-to-rent ratio = Property price ÷ Annual rent. Below 15 favours buying, 15–20 is neutral, above 20 favours renting. In Indian metros, this ratio is often 25–40x, which means renting is often financially smarter.
This calculator focuses on the core financial comparison. Home loan tax benefits (Section 24b interest deduction up to ₹2L, Section 80C principal up to ₹1.5L under old regime) can reduce buying cost by ₹50K–₹90K/year. However, these benefits are only available in the old tax regime — the new regime (default from Budget 2025) does not allow these deductions.
Yes — stamp duty and registration typically add 6–8% to the property cost in most Indian states. Either include this in the "Home Price" field or add it mentally to the total buying cost for an accurate comparison.
For a diversified equity mutual fund SIP over 10–20 years, 10–12% nominal return is a reasonable Indian-market assumption. For conservative investors, use 8–9% (balanced fund). This is the return you'd earn by investing money you save by renting instead of buying.