Rent vs Buy: The ₹50 Lakh Down Payment Dilemma
Uncover the math of 20-year home loan interest, rental yields, and equity SIP compounding.
“Priya, look at this luxury 3BHK! If we put down ₹20 Lakhs, the EMI is just ₹80,000/month. We must buy our own house instead of throwing money away on rent!”
“Hold on Rohan! An ₹80,000 EMI for 20 years at 8.5% means you repay ₹1.92 Crores to the bank on an ₹80 Lakh loan! That is ₹1.12 Crores in pure interest alone.”
“What if we rent a similar flat for ₹30,000/month and invest the ₹50,000 EMI savings + the ₹20 Lakh down payment into a 12% equity index SIP?”
“Incredible! After 20 years, the house is worth ~₹2.6 Crores, but the Rent + SIP portfolio grows to over ₹4.8 Crores! fincalculator.in makes the exact math undeniable.”
1. The Massive Interest Component
On an ₹80 Lakh home loan at 8.5% over 20 years, you pay ₹1.12 Crores in interest alone—more than the initial loan amount.
2. Low Rental Yields in India
Residential rental yields in Indian metros hover around 2.5% to 3.5%, allowing you to rent a ₹1 Cr house for just ₹25k–₹30k/month.
3. The Power of Rent + SIP
Investing the down payment plus the monthly EMI-rent savings into a 12% equity index fund consistently outperforms property equity.
Live Interactive Rent vs Buy Simulator
Enter your target property price, monthly rent, and expected return to see your personalized 20-year wealth outcome: