Rent vs Buy Calculator
The honest, numbers-based answer to India's biggest personal finance debate. Compare the true cost of renting vs buying — including opportunity cost of down payment, property appreciation, EMI, and maintenance.
Rent vs Buy in India — The Complete Picture
The "buy vs rent" question is deeply emotional in India — owning a home is tied to social status, family pressure, and a sense of security. But the financial reality is more nuanced, and in many Indian cities the numbers actually favour renting for longer periods than most people realise. Here's the honest breakdown.
The True Cost of Buying a Home
The sticker price is just the beginning. When you buy a home in India, add: stamp duty (4–8% of property value by state), registration fees (1–2%), brokerage (1–2%), home loan processing fees, interior and renovation costs (often ₹5–20L for a new flat), and then annual costs: property tax, maintenance charges (₹3–8/sq ft/month in societies), insurance, and repair/upkeep costs. On a ₹80L flat, all-in purchase costs are typically ₹88–95L. Monthly carrying cost includes EMI plus maintenance — often 1.5–2x the equivalent rent.
The Hidden Cost of Renting — Opportunity Cost
Renting seems simpler, but renters who don't invest the difference between EMI and rent are making a serious mistake. The key question is: if you invest your down payment (instead of using it for the house) and invest the monthly difference between EMI and rent — how does that corpus compare to owning the property? In high-appreciation markets like Mumbai and Bengaluru, property often wins. In slower markets with low rental yields, renting and investing can come out ahead or equal.
Price-to-Rent Ratio — A Quick Sanity Check
The Price-to-Rent ratio (property price ÷ annual rent) tells you the rent yield. In Indian metro cities: Mumbai and Bengaluru average 50–60x (meaning rental yield of 1.5–2% p.a.). Delhi NCR averages 35–45x. Indian cities with ratios above 40x generally favour renting financially — the rental yield is too low to justify the capital locked in property when equity SIP can return 12%. Use MoneyTechTools's calculator above to plug in your specific numbers.