Rent vs Buy
True cost of renting vs buying — 10-year financial comparison
Property Details
Historical Indian real estate CAGR: 5–10%
Varies by state: 4–7% typically
Housing society + repairs: 0.3–1%
Rent Scenario
Return on down payment if invested instead
Wealth Comparison — 15 Years
Cost Analysis
Monthly EMI
₹55,541
Monthly cost of buying (EMI + costs)
₹60,541
Monthly rent
₹25,000
Monthly surplus invested (if renting)
Difference between buying cost and rent
₹35,541
Entry transaction costs
Stamp duty ₹4.00 L + registration ₹80,000
₹5.20 L
Property value after 15 yr
₹2.21 Cr
Capital gains tax on sale
LTCG 20% with 5% indexation assumed
₹8.61 L
Total interest paid (tax saving offset)
Sec 24(b) saves ₹9.00 L total
₹63.04 L
Renting: investment corpus
Down payment + monthly surplus invested
₹3.05 Cr
Renting: post-tax corpus
₹2.76 Cr
Rent vs Buy Factors
→ Renting wins financially if: investment returns > property appreciation, or you have <3–5 years horizon.
→ Buying wins if: you stay long-term (10yr+), property in appreciating location, emotional value of ownership.
→ Hidden buying costs: stamp duty 4–7%, registration 1%, brokerage 1–2%, maintenance, property tax, repairs.
→ Price-to-rent ratio > 20 means renting is likely more economical. Mumbai/Delhi: >30. Smaller cities: 10–15.
→ Rule of thumb: break-even is typically 7–10 years. If you plan to stay shorter, rent. Longer — buy.
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FAQ
Rent vs Buy — FAQ
Common questions about this calculator
Financially, renting wins if equity returns (12%+) exceed property appreciation. Buying builds forced savings and offers tax deductions. The decision depends on your city, timeline, and financial goals.
Calculations are approximate and for educational purposes only. Excludes surcharge for income above ₹50L. Consult a Chartered Accountant for personalised tax advice.