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Rent vs Buy Matrix

Rent vs Buy Calculator

Compare the true long-term cost of buying (mortgage, stamp duty, property tax, maintenance, selling costs) against renting and investing your down payment and any monthly savings — year by year, not just a single snapshot.

🏠 Buying Scenario

🔑 Renting & Investing Scenario

How it works: The renter invests the down payment + stamp duty upfront, plus the monthly difference whenever owning costs more than renting, at your expected return. The buyer's net worth is home value minus remaining loan minus selling costs.
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Disclaimer: This calculator is provided for educational and informational purposes only. Results are estimations based on the assumptions you enter — actual property appreciation, rent growth, and investment returns are unpredictable and will differ. Results do not account for income tax benefits on home loans, rental income tax, or renovation costs, and do not constitute professional financial, investment, or real estate advice. Consult a qualified financial advisor before making a buy-vs-rent decision.

How the Rent vs Buy Comparison Works

This isn't a single "buying costs X, renting costs Y" comparison — it models both paths month by month over your full comparison period and compares what each path leaves you with at the end.

Buyer's Net Worth

Home Value at Year N − Remaining Loan Balance − Selling Costs

Renter's Net Worth

Future Value of [(Down Payment + Stamp Duty) + monthly (Buy Cost − Rent) when positive], compounded at your expected return

The core insight: a buyer's down payment and stamp duty are money that stops being available to invest elsewhere. A renter keeps that money working in the market. Whichever side ends with the higher net worth after N years is the better financial choice — for that specific set of assumptions.

Worked Example

₹80,00,000 home, 20% down (₹16,00,000), 8.5% loan for 20 years, 6% stamp duty, 0.5% property tax, 1% maintenance, 5% appreciation, 2% selling cost — compared against ₹25,000/month rent rising 5%/year, with savings invested at 10%/year, over 10 years:

YearBuyer Net WorthRenter Net Worth
1₹19,59,375₹28,14,819
5₹43,65,908₹64,99,738
10₹82,90,929₹1,34,23,665

In this scenario, renting and investing wins by roughly ₹51 lakh after 10 years — mainly because the rental yield (₹3 lakh/year rent on an ₹80 lakh home ≈ 3.75%) is low relative to India's typical equity returns. Change the rent, appreciation, or return assumptions and the verdict can flip — that's the point of running your own numbers.

Frequently Asked Questions

In many Indian metros, rental yields are just 2-3%, meaning rent is cheap relative to what it would cost to own the same property. If the money saved by renting — plus the down payment you didn't lock up — is invested and earns more than the property's appreciation rate, renting can build more net worth over time.
Yes. Stamp duty and registration (typically 5-7% of property value in India, varying by state) is treated as a one-time upfront cost of buying, alongside the down payment — both reduce what a renter would otherwise invest instead.
The buyer's "net worth" from the home equals the projected home value at the end of the period, minus the remaining loan balance and estimated selling costs — what they'd actually walk away with if they sold, not just the raw property value.
Not necessarily. Equity just means your money is tied up in the property instead of invested elsewhere. Whether that's better depends on how property appreciation compares to what you could earn investing the down payment and any cash flow difference — this calculator runs that comparison explicitly.