calc / real estate / RVB
Rent vs Buy
The honest version of the oldest money argument in India: buyer's equity after EMIs, appreciation and selling costs — against a renter who actually invests the down payment and the monthly difference.
Rent vs buy renter invests the difference
§1The honest framing
The comparison only works if the renter actually invests the difference — the down payment plus stamp duty they didn't spend, and every month's gap between the buyer's outflow and their rent. A renter who spends the difference always loses to a buyer, because the EMI is forced saving. This calculator assumes a disciplined renter; be honest with yourself about whether that's you.
On the defaults — a ₹90 lakh flat renting at ₹25,000, 20% down, 8.5% for 20 years — the EMI is about ₹62,500 a month. Over 10 years at 5% appreciation the buyer ends with roughly ₹93 lakh of net equity, while the renter — who invested the ₹18 lakh down payment plus ~₹6.3 lakh of duty upfront and around ₹4–5 lakh of savings each year at 11% — compounds to roughly ₹1.41 crore. Renting wins by about ₹48 lakh on these assumptions; push appreciation to 8% and it's a dead heat — anything above flips the verdict to buying. The ledger below shows the race year by year.
§2The gotchas
Stamp duty and registration run 6–7%, brokerage 1–2%, then interiors, society deposits and property tax. That's 10% or more of the price gone on day one, none of it financed by the loan — and the property has to appreciate its way back before the buyer breaks even on it.
Metro gross rental yields run 2–3.5% — you can rent a ₹90 lakh flat for ₹3 lakh a year. On pure arithmetic that structurally favours renting-and-investing. Buying wins through leverage on appreciation, forced saving, and the day rent stops being a bill — not through the yield.
Old-regime borrowers deduct up to ₹2 lakh of interest under Section 24(b) and principal under 80C, which trims the buyer's effective outflow. New-regime taxpayers on a self-occupied home get neither. If you're old-regime, mentally shade the verdict a few lakh toward buying.
Every other input moves the answer by lakhs; property appreciation moves it by tens of lakhs. Run the calculator at 3% and again at 8% before deciding anything — if the verdict flips inside the range you consider plausible, the honest answer is "it depends on the market", and you should decide on life factors, not this ledger.
§3Related
Price the one-time hit with the stamp duty calculator, size the loan with the home loan EMI calculator, and check what landlords actually earn with the rental yield calculator.