Rent vs Buy Calculator

Rent or buy — a decision beyond just cost

Renting keeps you flexible and free of a huge down payment; buying builds equity in an appreciating asset. There is no universal answer — the right choice hinges on your time horizon, cash position and local rent-to-price ratio. This calculator strips the emotion out by comparing the raw cash outflow of each path over your chosen number of years.

What the calculator compares

On the buying side, it adds a 20% down payment upfront to the cumulative EMIs on an 80%-financed loan. On the renting side, it sums up rent that rises each year by the increase rate you set. Because buying front-loads a large down payment, renting almost always looks cheaper in the early years. But rent compounds upward while a fixed EMI stays flat, so the lines cross at a break-even year — after which buying becomes the cheaper option in pure cash terms.

What it deliberately leaves out

This is a cash-only comparison, so keep three big factors in mind separately:

• Home appreciation — a rising property value and the equity you build make buying look far better than the cash figures alone.
• Tax benefits — under the Old regime, buyers deduct up to ₹2 lakh of interest (Section 24b) and ₹1.5 lakh of principal (Section 80C); renters claim HRA exemption.
• Opportunity cost — the down payment and any EMI-minus-rent surplus could instead be invested for market returns.

Which should you choose?

As a practical guide:

• Buy if you will stay 7 or more years, want stability, and can afford the down payment plus 5-8% stamp duty and registration.
• Rent if your horizon is short (under 3-5 years), you value mobility, or you can reliably invest the difference for higher returns.

Run the numbers with your own home price, rent and horizon above, then layer in appreciation and tax benefits to reach a decision that fits both your finances and your life plans.