Property
Rent vs Buy
Compare renting vs buying costs over time
About the Rent vs Buy calculator
Comprehensive rent vs buy calculator to compare long-term costs of renting versus buying property. Make informed decisions with detailed financial analysis including opportunity costs, investment returns, and break-even analysis.
How the maths works
Net Cost Comparison
Net Buying Cost = Total Buying Costs - Property Value | Net Renting Cost = Total Rent - Investment Returns- Total Buying Costs
- Down Payment + EMI Payments + Maintenance + Taxes
- Property Value
- Current Property Value + Appreciation
- Total Rent
- Monthly Rent × Months + Annual Increases
- Investment Returns
- Down Payment Invested + Monthly Savings Invested
A worked example
₹80 Lakh Property vs ₹35K Rent
| Property Price | ₹80,00,000 |
| Down Payment | ₹16,00,000 |
| Monthly Rent | ₹35,000 |
| Time Horizon | 10 years |
| Investment Return | 12% per annum |
Recommendation: Renting is better, Savings: ₹18,50,000, Break-even: 12 years
How to use it
- Enter buying scenario details including property price and loan terms
- Add renting scenario with monthly rent and annual increases
- Set investment return rate for alternative investments
- Choose time horizon for comparison analysis
- Review detailed comparison and recommendation
What it accounts for
- Complete cost comparison between renting and buying scenarios
- Investment opportunity cost analysis for down payment and savings
- Break-even point calculation to determine optimal holding period
- Property appreciation and rent increase projections
- Clear recommendation based on financial analysis
Why it is worth working out
- Make informed rent vs buy decisions based on financial analysis
- Understand opportunity costs of tying up money in property
- Plan long-term housing strategy with break-even insights
- Compare scenarios with different time horizons
Questions people ask
Is buying always better than renting?
No. Buying wins when you stay long enough for appreciation and principal repayment to outrun the transaction costs, the interest and the ownership costs. Under about seven years, in most Indian cities at current price-to-rent ratios, renting and investing the difference usually wins.
What is the rent-to-price ratio and why does it matter?
Annual rent divided by property price. In many Indian metros it sits around 2% to 3%, meaning rent costs far less than the cost of the capital tied up in the same flat. The lower the ratio, the longer buying takes to pay off.
What should I do with the money I save by renting?
Invest the difference, deliberately and automatically. The rent-versus-buy comparison only holds if the gap is actually invested. Renting and spending the difference is a worse outcome than buying, and it is what usually happens.
What does buying give me that the maths misses?
Security of tenure, freedom to alter the place, no landlord ending the arrangement, and a forced saving habit. These are real and they are worth paying something for. Just know what you are paying, which is what this calculator is for.
Read more on this
- Rent versus buy — the comparison that is almost always done wrong — Comparing rent to EMI is the wrong comparison. Compare rent to the money you never get back, and the answer changes for a lot of people.
This calculator is for information and education. It is not financial advice — see the disclaimer.