Rent vs Buy Home Calculator 2026

Compare buying a home with a home loan vs renting and investing down payment & monthly savings in equity SIPs in India.

Home Buying Parameters

Property Purchase Price

₹

₹10.00 L₹10.00 Cr

Down Payment (% of price)

10%50%

Buying Costs (Stamp Duty & Reg. %)

2%10%

Selling Costs (Brokerage %)

0%5%

Home Loan Interest Rate (%)

6%15%

Loan Tenure (Years)

530

Property Appreciation Rate (%)

2%15%

Annual Maintenance & Property Tax (%)

0.5%3%

Renting & Investment Parameters

Current Monthly Rent

₹

₹5,000₹3.00 L

Annual Rent Escalation Rate (%)

3%15%

Equity SIP Investment Return

6%18%

Comparison Duration

530

Income tax assumptions

Your marginal tax rate

Tax regime

Financial RecommendationRENTING & INVESTING IS BETTER

Net Wealth Advantage over 20 Years

₹3.03 Cr

Renting and investing cash savings in equity creates ₹3.03 Cr more net worth.

After 20 Years Wealth Comparison

If You Rent & Invest in MFs:

Mutual Fund Portfolio (Down Payment + Monthly SIP)

₹6.18 Cr

If You Buy House Today:

Property Net Value (House Price − 0 Loan Balance)

₹3.14 Cr

Monthly Home EMI₹69,426

Down Payment + Fees₹25.00 L

💡 Emotional Decision vs Investment Decision

1. The Emotional Factor (Safety & Family): Buying your first house is often an emotional decision. It provides family safety, personal freedom, sense of ownership, and peace of mind. If your wife and kids want a place to call home, peace of mind outweighs pure mathematical ROI.

2. Cons of Buying: Upfront stamp duty & registration fees (5–7%), continuous society maintenance (~1%/yr), interest drain in early loan years, property tax, and illiquidity during financial emergencies.

Pure Financial Perspective: If you are looking strictly for financial investment and capital growth, compare the mutual fund compounding numbers above before locking capital into real estate.

Net Worth Growth Trajectory (Buyer vs Renter)

Compare real estate property equity accumulation vs equity mutual fund portfolio growth over 20 years.

Year-by-Year Financial Schedule Breakdown

Yr 1Renter +₹8.82 L
Home Value
₹1.06 Cr
Loan Balance
₹78.41 L
Buyer Net Worth
₹25.47 L
Rent Paid (Yr)
₹3.60 L
Renter Portfolio
₹34.29 L
Yr 2Renter +₹11.12 L
Home Value
₹1.12 Cr
Loan Balance
₹76.67 L
Buyer Net Worth
₹33.44 L
Rent Paid (Yr)
₹3.85 L
Renter Portfolio
₹44.56 L
Yr 3Renter +₹13.99 L
Home Value
₹1.19 Cr
Loan Balance
₹74.79 L
Buyer Net Worth
₹41.93 L
Rent Paid (Yr)
₹4.12 L
Renter Portfolio
₹55.92 L
Yr 4Renter +₹17.50 L
Home Value
₹1.26 Cr
Loan Balance
₹72.74 L
Buyer Net Worth
₹50.99 L
Rent Paid (Yr)
₹4.41 L
Renter Portfolio
₹68.49 L
Yr 5Renter +₹21.77 L
Home Value
₹1.34 Cr
Loan Balance
₹70.50 L
Buyer Net Worth
₹60.64 L
Rent Paid (Yr)
₹4.72 L
Renter Portfolio
₹82.41 L
Yr 6Renter +₹26.88 L
Home Value
₹1.42 Cr
Loan Balance
₹68.07 L
Buyer Net Worth
₹70.94 L
Rent Paid (Yr)
₹5.05 L
Renter Portfolio
₹97.83 L
Yr 7Renter +₹32.99 L
Home Value
₹1.50 Cr
Loan Balance
₹65.42 L
Buyer Net Worth
₹81.93 L
Rent Paid (Yr)
₹5.40 L
Renter Portfolio
₹1.15 Cr
Yr 8Renter +₹40.22 L
Home Value
₹1.59 Cr
Loan Balance
₹62.54 L
Buyer Net Worth
₹93.65 L
Rent Paid (Yr)
₹5.78 L
Renter Portfolio
₹1.34 Cr
Yr 9Renter +₹48.74 L
Home Value
₹1.69 Cr
Loan Balance
₹59.41 L
Buyer Net Worth
₹1.06 Cr
Rent Paid (Yr)
₹6.19 L
Renter Portfolio
₹1.55 Cr
Yr 10Renter +₹58.75 L
Home Value
₹1.79 Cr
Loan Balance
₹55.99 L
Buyer Net Worth
₹1.20 Cr
Rent Paid (Yr)
₹6.62 L
Renter Portfolio
₹1.78 Cr
Yr 11Renter +₹70.44 L
Home Value
₹1.90 Cr
Loan Balance
₹52.28 L
Buyer Net Worth
₹1.34 Cr
Rent Paid (Yr)
₹7.08 L
Renter Portfolio
₹2.04 Cr
Yr 12Renter +₹84.05 L
Home Value
₹2.01 Cr
Loan Balance
₹48.24 L
Buyer Net Worth
₹1.49 Cr
Rent Paid (Yr)
₹7.58 L
Renter Portfolio
₹2.33 Cr
Yr 13Renter +₹99.86 L
Home Value
₹2.13 Cr
Loan Balance
₹43.84 L
Buyer Net Worth
₹1.65 Cr
Rent Paid (Yr)
₹8.11 L
Renter Portfolio
₹2.65 Cr
Yr 14Renter +₹1.18 Cr
Home Value
₹2.26 Cr
Loan Balance
₹39.05 L
Buyer Net Worth
₹1.83 Cr
Rent Paid (Yr)
₹8.68 L
Renter Portfolio
₹3.01 Cr
Yr 15Renter +₹1.39 Cr
Home Value
₹2.40 Cr
Loan Balance
₹33.84 L
Buyer Net Worth
₹2.01 Cr
Rent Paid (Yr)
₹9.28 L
Renter Portfolio
₹3.40 Cr
Yr 16Renter +₹1.64 Cr
Home Value
₹2.54 Cr
Loan Balance
₹28.17 L
Buyer Net Worth
₹2.21 Cr
Rent Paid (Yr)
₹9.93 L
Renter Portfolio
₹3.85 Cr
Yr 17Renter +₹1.92 Cr
Home Value
₹2.69 Cr
Loan Balance
₹21.99 L
Buyer Net Worth
₹2.42 Cr
Rent Paid (Yr)
₹10.63 L
Renter Portfolio
₹4.34 Cr
Yr 18Renter +₹2.24 Cr
Home Value
₹2.85 Cr
Loan Balance
₹15.27 L
Buyer Net Worth
₹2.64 Cr
Rent Paid (Yr)
₹11.37 L
Renter Portfolio
₹4.89 Cr
Yr 19Renter +₹2.61 Cr
Home Value
₹3.03 Cr
Loan Balance
₹7.96 L
Buyer Net Worth
₹2.89 Cr
Rent Paid (Yr)
₹12.17 L
Renter Portfolio
₹5.50 Cr
Yr 20Renter +₹3.03 Cr
Home Value
₹3.21 Cr
Loan Balance
₹0
Buyer Net Worth
₹3.14 Cr
Rent Paid (Yr)
₹13.02 L
Renter Portfolio
₹6.18 Cr

Year	Home Value	Loan Balance	Buyer Net Worth	Rent Paid (Yr)	Renter Portfolio	Advantage
Yr 1	₹1.06 Cr	₹78.41 L	₹25.47 L	₹3.60 L	₹34.29 L	Renter +₹8.82 L
Yr 2	₹1.12 Cr	₹76.67 L	₹33.44 L	₹3.85 L	₹44.56 L	Renter +₹11.12 L
Yr 3	₹1.19 Cr	₹74.79 L	₹41.93 L	₹4.12 L	₹55.92 L	Renter +₹13.99 L
Yr 4	₹1.26 Cr	₹72.74 L	₹50.99 L	₹4.41 L	₹68.49 L	Renter +₹17.50 L
Yr 5	₹1.34 Cr	₹70.50 L	₹60.64 L	₹4.72 L	₹82.41 L	Renter +₹21.77 L
Yr 6	₹1.42 Cr	₹68.07 L	₹70.94 L	₹5.05 L	₹97.83 L	Renter +₹26.88 L
Yr 7	₹1.50 Cr	₹65.42 L	₹81.93 L	₹5.40 L	₹1.15 Cr	Renter +₹32.99 L
Yr 8	₹1.59 Cr	₹62.54 L	₹93.65 L	₹5.78 L	₹1.34 Cr	Renter +₹40.22 L
Yr 9	₹1.69 Cr	₹59.41 L	₹1.06 Cr	₹6.19 L	₹1.55 Cr	Renter +₹48.74 L
Yr 10	₹1.79 Cr	₹55.99 L	₹1.20 Cr	₹6.62 L	₹1.78 Cr	Renter +₹58.75 L
Yr 11	₹1.90 Cr	₹52.28 L	₹1.34 Cr	₹7.08 L	₹2.04 Cr	Renter +₹70.44 L
Yr 12	₹2.01 Cr	₹48.24 L	₹1.49 Cr	₹7.58 L	₹2.33 Cr	Renter +₹84.05 L
Yr 13	₹2.13 Cr	₹43.84 L	₹1.65 Cr	₹8.11 L	₹2.65 Cr	Renter +₹99.86 L
Yr 14	₹2.26 Cr	₹39.05 L	₹1.83 Cr	₹8.68 L	₹3.01 Cr	Renter +₹1.18 Cr
Yr 15	₹2.40 Cr	₹33.84 L	₹2.01 Cr	₹9.28 L	₹3.40 Cr	Renter +₹1.39 Cr
Yr 16	₹2.54 Cr	₹28.17 L	₹2.21 Cr	₹9.93 L	₹3.85 Cr	Renter +₹1.64 Cr
Yr 17	₹2.69 Cr	₹21.99 L	₹2.42 Cr	₹10.63 L	₹4.34 Cr	Renter +₹1.92 Cr
Yr 18	₹2.85 Cr	₹15.27 L	₹2.64 Cr	₹11.37 L	₹4.89 Cr	Renter +₹2.24 Cr
Yr 19	₹3.03 Cr	₹7.96 L	₹2.89 Cr	₹12.17 L	₹5.50 Cr	Renter +₹2.61 Cr
Yr 20	₹3.21 Cr	₹0	₹3.14 Cr	₹13.02 L	₹6.18 Cr	Renter +₹3.03 Cr

📖 In-Depth Financial Guide12 min read

Rent vs Buy in India 2026: Real Math, Hidden Costs & 20-Year Wealth Comparison

Why ₹50L home loans cost ₹54L extra in interest, 3% rental yields in metro cities, and how investing the down payment creates higher liquid wealth.

Read Full Guide

What tax does to this comparison

Tax is switched off, so both sides are shown before tax. The renter's equity would attract 12.5% LTCG on redemption and the buyer may be able to claim section 24(b).

Rent vs Buy Mathematical Formula & Indian Tax Rules

Both sides are stepped month by month over the full horizon, so a surplus and a shortfall are treated the same way. Every rupee the buyer spends above the rent is invested by the renter in the same month, and each side is then shown after the tax it would actually pay:

Buyer net worth = Property value x (1 - selling cost %) - Outstanding loan + Cumulative tax saved

Renter net worth = Portfolio - LTCG tax, where Portfolio(m) = Portfolio(m-1) x (1 + r/12) + (EMI + upkeep - rent)

Buyer tax saved = [ min(interest, 24(b) limit) + min(principal, spare 80C) ] x your marginal rate

Renter LTCG = max(0, Portfolio - amount invested - ₹1,25,000) x 12.5%

Where:

r = expected equity return. The 24(b) limit is ₹2,00,000 for a self-occupied house and the rent received for a let-out one. Under the new regime a self-occupied house gets neither 24(b) nor 80C, so the buyer's tax saved is zero.

Tax Savings Sec 24(b) & 80C: Home loan interest provides up to ₹2,00,000 tax deduction under Section 24(b) for self-occupied property in Old Tax Regime.
HRA Exemption: Renters in Old Tax Regime can claim HRA tax exemption under Sec 10(13A).

Authoritative Statutory References

Income Tax Dept - Sec 24(b) Home Loan Rules RBI Home Loan Floating Rate Guidelines

Frequently Asked Questions — Rent vs Buy

Is it better to rent or buy a house in India?

Compare the rental yield with the home loan rate. Indian metros yield 2%–3.5% while home loans cost 8.5%–9.5%, so buying is financially worse in the short run and only wins past roughly 8–12 years, once rent inflation and property appreciation catch up with the interest paid.

What is the price-to-rent ratio and what does it tell me?

Annual rent divided into the property price. Below 15 favours buying, 15–20 is balanced, and above 20 strongly favours renting. Most Indian metros sit at 28–35, which is why renting and investing the difference has outperformed buying in those cities over the last decade.

What costs do buyers forget in the rent-vs-buy comparison?

Stamp duty and registration of 5%–8%, brokerage, interiors, annual maintenance of 0.5%–1% of property value, property tax, and the opportunity cost of the down payment. Together these typically add 12%–15% to the purchase price in the first year.

Does buying still make sense if I plan to stay long term?

Yes. Beyond 10 years the loan's early interest load is behind you, rent would have inflated 60%–80%, and you own an appreciating asset. Buying is a poor 5-year decision and a reasonable 15-year one — the horizon matters more than the price.

How does HRA on the rent side compare with the missing 24(b) on the buy side?

Under the new regime, which is the default, the comparison has tilted towards renting for tax purposes. HRA exemption under section 10(13A) is also unavailable in the new regime, but a self-occupied house loses much more: no section 24(b) on interest and no section 80C on principal. If you are still on the old regime, HRA in a metro can exempt a large part of your rent, while the buyer gets up to Rs 2 lakh of interest and Rs 1.5 lakh of principal. Run your own numbers under the regime you actually file.

What about buying to let out while continuing to rent where I live?

This is a common Indian arrangement and the tax rules treat it far better than a self-occupied house. A let-out property keeps the 30% standard deduction under section 24(a) and uncapped interest under section 24(b) in both regimes. The limit is the set-off rule: in the new regime a loss from house property cannot be set off against salary at all, so the relief effectively stops at the rent you receive. With metro yields near 3% against loan rates near 8.5%, the gap is still real.

How much do stamp duty and registration differ by state?

A great deal, and it is a cost renters never pay. Maharashtra charges about 6% for men and 5% for women, Delhi 6% and 4%, Karnataka 5% on properties above Rs 45 lakh, Tamil Nadu 7% plus 4% registration, and Haryana and Rajasthan offer similar rebates for female buyers. Registration is usually another 1%, often capped. On a Rs 80 lakh flat the difference between registering in one spouse name or the other can be Rs 80,000 or more, and none of it is recoverable on resale.

💻

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