Is renting or buying cheaper for me?. The Rent vs Buy Calculator takes property price, down payment, home loan rate, years you will stay, maintenance and tax per year (share of price), property appreciation per year, monthly rent for a similar home, rent increase per year, return if the down payment were invested instead and returns net cost of buying minus net cost of renting plus cheaper over the period, net cost of buying (payments + costs − value at the end), net cost of renting (rent − investment gains on the deposit), monthly emi, property value at the end. Results update as you type, and the formula is shown under the result so you can repeat it in your own spreadsheet.
Property returns depend on assumptions about rent, occupancy, costs and appreciation that are easy to make optimistic. Enter conservative figures and remember that transaction costs, taxes and vacancy periods are real. Use the worked example below to check the maths against your own figures.
How the Rent vs Buy Calculator works
Buying wins when appreciation and the years you stay are high; renting wins when rents are low relative to prices and the deposit earns a good return. The result is only as good as the appreciation and return assumptions, so test several.
Worked example
With the example values (property price of ₹8,000,000, down payment of 20%, home loan rate of 8.5%, years you will stay of 20 years, maintenance and tax per year (share of price) of 1%, property appreciation per year of 5%, monthly rent for a similar home of ₹25,000, rent increase per year of 5%, return if the down payment were invested instead of 8%), the net cost of buying minus net cost of renting is -₹8,758,871.58; cheaper over the period Buying works out cheaper, net cost of buying (payments + costs − value at the end) -₹4,696,616.78, net cost of renting (rent − investment gains on the deposit) ₹4,062,254.80, monthly emi ₹55,540.69, property value at the end ₹21,226,381.64. Change any figure above and the result updates immediately; use Copy results to paste the summary into a note or email.
Assumptions and limits: Ignores transaction costs, tax benefits on the loan and rent paid, and the loan balance still owed if you leave early.
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Frequently Asked Questions
How is net cost of buying minus net cost of renting calculated?
buying: EMIs + down payment + maintenance − property value at the end; renting: total rent (rising yearly) − growth of the down payment invested elsewhere.
Which figures do I need?
Property price, down payment, home loan rate, years you will stay, maintenance and tax per year (share of price), property appreciation per year, monthly rent for a similar home, rent increase per year, return if the down payment were invested instead. Take them from the same period and the same set of accounts or reports so the ratio is consistent, and check the example values as a guide to the units expected.
Which costs are easy to forget?
Vacancy periods, maintenance, property tax, insurance, brokerage on purchase and sale, and stamp duty. Include them for a realistic return.
What assumptions does this calculator make?
Ignores transaction costs, tax benefits on the loan and rent paid, and the loan balance still owed if you leave early.
