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Rent vs Buy Calculator

The most under-calculated decision most Indians make. Compare buyer vs renter net worth at end of your horizon, with realistic Indian assumptions.

Buying scenario
₹1.00 Cr
₹20.00 L

Indian residential real estate: 4–7% long-term

₹15,000
Renting scenario
₹35,000

Landlords typically hike 5–10% annually

Where you'd invest the down-payment + EMI-rent surplus

Horizon
Rent wins
₹14.14 L
Net-worth difference after 10 years
Buyer
Monthly EMI₹69,426
Property value at horizon₹1.79 Cr
Loan outstanding at horizon₹56.00 L
Net worth₹1.23 Cr
Renter
Down payment invested₹20.00 L
Investment return12% p.a.
Net worth₹1.37 Cr
What tips it: Long horizon + high property appreciation + low rent-to-price ratio → buying wins. Short stay + low appreciation + high investment returns → renting wins. Rule of thumb: if annual rent < 3% of property price, renting is usually mathematically better; over 5%, buying is. Doesn't factor emotional value, forced savings discipline, or stamp duty / registration (~5–7% of price at purchase).
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Simple estimate for rent vs buy. Rates & taxes will vary — verify before acting.

Compares the long-run financial outcome of buying a home with a loan versus renting an equivalent property and investing the difference — the down payment and any monthly savings — in the market instead.

How it's calculated

The 'buy' path tracks home equity built through EMI payments plus assumed property price appreciation, minus total interest paid. The 'rent' path invests the down payment amount plus the monthly gap between rent and EMI (whichever is lower) at your assumed investment return, with rent itself growing annually. The comparison is only as good as its assumptions — property appreciation and investment return are both genuinely uncertain over a 15–20 year horizon.

Worked example

A ₹1Cr property with a ₹20L down payment, an EMI around ₹1.74L/month versus ₹35,000/month rent, invested at 12% versus 6% property appreciation, is exactly the kind of comparison where the 'right' answer flips depending on which appreciation assumption you trust — worth running at a few different property-growth scenarios rather than trusting one number.

Frequently asked
Is renting and investing actually better than buying in India?

It depends heavily on your city's rent-to-price ratio and how you weight the non-financial value of owning (stability, no landlord risk, forced savings discipline). In high price-to-rent cities, renting and investing the difference can out-perform buying financially — but 'financially optimal' isn't the only thing that matters in a housing decision.

What property appreciation rate should I assume?

Indian residential real estate has historically delivered quite modest returns net of transaction costs (stamp duty, brokerage) in many markets — 5–7% is a more defensible long-run assumption than the double-digit numbers sometimes quoted, though it varies enormously by city and locality.

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