Rent vs Buy Calculator
Compare the net cost of renting vs. buying a home over time.
Assumptions used in this calculation
- Simplified opportunity cost: The renter's investment gain is calculated only on the initial down payment, not on any month-to-month savings from renting being cheaper than buying.
- Property tax and maintenance: Calculated as a percentage of the home's current (appreciating) value each year.
About this calculator
"Rent is throwing money away" is a common assumption, but it skips the opportunity cost of the cash tied up in a down payment and ignores the equity actually built through a mortgage, both of which shift the real answer depending on numbers specific to your situation. This calculator compares the net cost of buying (total cash spent on down payment, EMI, tax and maintenance, minus the home equity built by the end of the period) against the net cost of renting (rent paid, minus the investment growth the down payment would have earned if invested instead) over a time horizon you choose. Home price, comparable rent and years to compare are the three inputs; the output is a plain-language recommendation for which option costs less over that period. Working through this comparison by hand means modelling amortization, appreciation and investment growth simultaneously, well beyond a quick mental estimate.
Worked example
₹80,00,000 home vs. ₹25,000/month rent, compared over 10 years
Result: Renting works out cheaper by roughly ₹9,30,000 over 10 years, in this example
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