Rent vs Buy Calculator

The rent-vs-buy decision is among the most consequential financial choices an Indian household makes. This calculator compares the total economic cost of buying a home — your down payment, home loan EMI, property tax, society maintenance, and the eventual property value — against the cost of renting an equivalent home and investing the down payment elsewhere. The output is a clear recommendation plus a break-even year so you can see exactly when (or whether) buying overtakes renting at your specific assumptions.

What goes into the buying side

Buying costs include the down payment (which is real cash leaving your account on day one), the monthly EMI on the home loan, annual property tax, annual society maintenance, and a small inflation factor on those recurring costs. Against these, your house appreciates at your assumed rate, building equity. We compute the net economic cost at the end of your horizon as cumulative spending minus the property's market value at that point — a negative number means your equity exceeds your spending (you're net-positive).

What goes into the renting side

Renting costs are simpler: annual rent, escalating at your assumed rate. We then add back an opportunity gain: the down payment you didn't spend, invested at your expected return, plus each year's surplus (when EMI + ownership costs exceed rent) reinvested at the same return. If you're salaried, we apply an approximate HRA tax shield equivalent to 50% of rent × your tax slab (a conservative proxy for the exact Sec 10(13A) least-of-three rule — for precise HRA, use the dedicated HRA Calculator).

How break-even is interpreted

Break-even is the first year from which buying's net cost stays below renting's net cost for the rest of your horizon. If renting wins throughout, the break-even is reported as zero — meaning, at your assumptions, buying never overtakes renting within the horizon. Don't read "break-even = 0" as "never buy" — it just means longer horizons or different assumptions (higher appreciation, lower investment return) may flip the answer. The Key Assumptions panel calls out which knobs matter most.

Tax angle (Section 24(b) and HRA)

Under the Old Tax Regime, home loan interest is deductible up to ₹2 Lakh per FY for a self-occupied property (Sec 24(b)), and principal up to ₹1.5 Lakh per FY as part of the 80C limit. The renter's HRA exemption under Sec 10(13A) is the least of (1) HRA received, (2) rent − 10% of basic, or (3) 50%/40% of basic (metro / non-metro). Under the New Tax Regime — the default from FY 2024-25 — neither deduction is available, so the comparison shifts depending on which regime you file under. This calculator's salaried toggle approximates the HRA shield; the buyer's interest-deduction benefit is mentioned in the disclaimer but not added to the math, keeping the recommendation conservative.