Rent vs Buy Calculator
Should you rent or buy a home in India? See the total cost comparison and break-even year for your situation.
| Year | Buy: Net Cost | Rent: Net Cost | Difference |
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Frequently asked questions
What costs are included in the "buy" calculation?
Buying costs include: EMI payments over the stay duration, down payment (opportunity cost at investment return rate), registration and stamp duty (estimated at 7% of home price), annual maintenance (0.5% of home value). The home sale value at exit is subtracted to arrive at the net cost.
What is the break-even year?
The break-even year is when the cumulative net cost of buying first becomes lower than the cumulative net cost of renting. Before this year, renting is cheaper; after it, buying is cheaper — assuming the input assumptions hold.
What return should I use for the investment return?
Use the after-tax return you realistically expect from investing your down payment and EMI savings. Equity mutual funds have historically returned 10–14% in India. Debt funds return 6–8%. A balanced portfolio might return 8–11%. Be conservative.
Does this include tax benefits on home loans?
This calculator uses pre-tax figures for simplicity. Home loan interest is deductible up to ₹2 lakh per year under Section 24(b) for self-occupied property, and principal repayment up to ₹1.5 lakh under Section 80C. These benefits make buying relatively more attractive.
Should I include rent escalation?
This calculator uses current rent as a flat figure. In reality, rents in Indian metros increase 5–10% annually. Higher rent escalation makes buying more attractive over long durations. If your expected rent will rise significantly, buying looks better than this calculator shows.