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Rent vs buy calculator
The fair comparison: both choices spend the same each month, and whoever spends less invests the difference. Which side ends up richer?
How the comparison works
The buyer pays the down payment, buying costs and the EMI, and owns a home that grows in value. The renter invests the down payment and buying costs instead, pays rent, and invests whatever the EMI would have cost above the rent. Once rent rises past the EMI, the buyer invests the difference.
With the defaults, an ₹80 lakh flat with 20% down at 8.5% over 20 years means an EMI of about ₹55,500 against a ₹25,000 rent. Investing that gap at 10% leaves the renter ahead by roughly ₹99 lakh after 20 years if property grows at 5% a year. Raise property growth or lower the investment return and the answer can flip.
What the numbers leave out
- Security, control and not having to move are real benefits of owning that no spreadsheet captures.
- The renter only wins if the difference is actually invested every month.
- Maintenance, property tax, home loan tax benefits under the old regime and selling costs are not included.
What is a sensible price-to-rent ratio?
Divide the price by a year’s rent. In many Indian cities it is 30 to 40, meaning rent yields about 2.5% to 3.3%; at those levels renting and investing often wins on pure money terms.