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Personal FinanceIndividual
Rent vs Buy — Home
Should you buy or keep renting? Models EMI, appreciation, and the opportunity cost of investing your down payment instead.
Your inputs
₹1,00,00,000
₹
₹25,00,000
₹
₹40,000
₹
Result
- Net position if you BUY
- ₹1,25,81,535
- Net position if you RENT + invest
- ₹95,87,205
- Break-even year
- Year 1
- Recommended
- Buy
Reviewed by CA team
Estimates only — rules change frequently. Please verify with a CA before you file, invest, or sign anything.
Assumptions
- Ignores property tax, maintenance, registration, brokerage, and tax benefits.
- Down payment grows at alternative-investment rate when you rent.
- Whenever EMI > rent, the difference is invested at the alt rate.
- Constant rates throughout the horizon.
Buy vs Rent — net position over time
How this is calculated
Reviewed by CA teamEMI = P × r × (1 + r)^n / ((1 + r)^n − 1) Buy net at year y = HomePrice × (1 + a)^y − Loan outstanding(y) Rent net at year y = DownPayment × (1 + alt)^y + Σ max(0, EMI − rent) compounded at alt Recommended path = whichever net position is higher at the chosen horizon.
Worked example
Home ₹1cr, down ₹25L, loan 20y @ 9%, rent ₹40k growing 7%, appreciation 6%, alt return 10%, horizon 10y. EMI ≈ ₹67,500. After 10 years home value ≈ ₹1.79cr, loan outstanding ≈ ₹56L, buy net ≈ ₹1.23cr. Rent corpus from ₹25L + EMI−rent surplus invested at 10% ≈ ₹1.16cr. Buy edges out — break-even around year 7-8.
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