Decisions
Compare Two Choices
Rent or buy, SIP or FD, prepay or invest, new car or used — one engine that funds both choices from the same budget and says which leaves you richer, and when it changes hands
About the Compare Two Choices calculator
Rent vs buy, SIP vs FD, prepay vs invest, new car vs used, EV vs petrol, buy vs lease. One engine that funds both choices from the same budget, invests whatever the cheaper one saves, and says which leaves you richer - and when the answer changes hands.
How the maths works
Wealth at the horizon, on one budget
Wealth = what you own at the end + what the money you did not spend grew to- The budget
- In every month, whatever the more expensive choice costs. The cheaper choice invests the difference at the return you set - which is what stops the comparison being a comparison of outgoings
- What you own
- Net of what you would pay to get out: selling costs on a house, exit tax on a fund, the loan still outstanding on a car
- The crossover
- The month after which the winner never falls behind again. Buying beats renting eventually in most inputs; whether eventually arrives before you move is the actual decision
- Today's money
- The same gap discounted at your inflation assumption, because a lakh in 2046 is not a lakh
A worked example
A ₹80 lakh flat, or renting it at ₹28,000
| Property price | ₹80,00,000 |
| Down payment and costs | 20% plus 8% stamp duty and brokerage |
| Rent | ₹28,000, rising 7% a year |
| Property appreciation | 6% a year |
| Return if invested instead | 11% a year |
| Horizon | 10 years |
Buying leaves ₹95.6 lakh, renting-and-investing leaves ₹1.19 crore - renting ahead by ₹23.7 lakh, and ahead from month one. Raise property appreciation to 12% and buying wins instead, which tells you the whole decision is a bet on one number.
How to use it
- Pick the decision you are facing from the eight
- Adjust the figures - every default is a plausible 2026 Indian number, not a round one
- Read the two wealth figures, the gap between them, and the month it changes hands
- Check the drivers table to see whether the gap is in the asset or in the side investments
- Change the one assumption you are least sure of and watch what it does
What it accounts for
- Eight decisions on one engine, so two of them can never disagree about the same arithmetic
- Both choices funded from one budget - the down payment a renter did not make is invested, not ignored
- Says when the answer changes hands, not only what it is at the end
- Splits the gap into what you own and what your side investments grew to, and the two add up exactly
- Exit tax charged where the money is actually taken out, and selling costs applied throughout
- Every answer comes with the reasoning written next to the arithmetic that produced it
Why it is worth working out
- Avoids the mistake that makes most rent-vs-buy comparisons wrong - comparing rent against an EMI and forgetting the down payment
- Turns an argument into a number you can check
- Makes the sensitivity visible, so you know which assumption the answer really rests on
- Answers eight questions in one place, in one shape, so they can be compared with each other
Questions people ask
Why does this give a different answer from other rent-versus-buy calculators?
Because both choices are funded from the same budget. Most comparisons put rent next to an EMI and stop, which quietly assumes the renter set fire to the down payment. Here the cheaper choice invests every rupee it did not spend, at the return you set — so the ₹22 lakh a buyer puts down on day one is working for the renter instead, and that is usually the largest single term in the answer.
What does the crossover month mean, and why is it the important number?
It is the month after which the winner never falls behind again. Buying beats renting eventually under most assumptions; whether "eventually" arrives before you move is the actual decision. A comparison that only reports the figure at year ten is silently advising somebody who will leave in year four.
Where do the default numbers come from?
They are plausible Indian figures for 2026 — an 8.5% home loan, 6% long-run residential appreciation, 11% on equity, 7% on a deposit, 5% to 8% stamp duty. None is chosen to make a point, because a default that flatters one side is a thumb on the scale. Change every one of them; the tool is for your figures, not these.
Is tax accounted for?
Yes, and asymmetrically where reality is asymmetric. Equity gains are charged at 12.5% on exit above the ₹1.25 lakh section 112A exemption. Deposit interest is taxed every year at your slab, which is why the rate that compounds is the post-tax one. Home loan interest is deductible only under the old regime, up to ₹2 lakh a year.
Why does the electric car lose on the default numbers?
Depreciation, not fuel. The default sets 20% a year for an electric car against 14% for petrol, which is roughly what the Indian resale market has actually done while battery technology keeps moving. The energy saving is real and large; over eight years it is simply smaller than the extra depreciation on a higher purchase price. If you think that gap will close, change it — it moves the answer more than the fuel price does.
Can I trust a ten-year projection?
Not as a forecast. Treat it as a way of finding out which assumption the answer actually rests on. Change the one you are least sure of and watch how far the result moves: if a point of property appreciation flips it, you are not choosing between two strategies, you are betting on one number.
This calculator is for information and education. It is not financial advice — see the disclaimer.