Rent vs Buy Calculator — which leaves you richer
Buying a home is not always better than renting. Enter the price, the rent for a similar home and your assumptions, and compare your net worth either way after the years you choose.
Buying
Renting
Net worth from the house alone, before tax benefits. It ignores the security of owning and the freedom of renting — both matter.
Spendly adds up your banks, investments, loans and cards into one net worth, with the change since last month.
Track my net worth →How it is calculated
Buying: you pay 20% down plus about 7% in stamp duty and registration, then the EMI on a 20-year loan and maintenance of about 0.5% of the price a year. At the end you own a house that has grown in value, minus the loan still owed.
Renting: you invest the money you would have put down, and each month whoever spends less — the owner or the renter — invests the difference. Rent rises every year. The result is the investments the renter has built.
The answer depends most on the price-to-rent ratio, house price growth and the return on investments. In big Indian cities rents are often 2–3% of the price a year, which tends to favour renting unless prices rise fast.
Buy = house value at the end − loan left + buyer’s invested savings Rent = (down payment + stamp duty) grown at the investment return + monthly difference invested Each month the side that pays less invests the difference
Questions
Is it better to rent or buy a house in India?
It depends on the city, the price-to-rent ratio and how long you will stay. Buying usually wins only over long periods or when prices rise fast; the calculator shows the break-even with your numbers.
What about tax benefits on a home loan?
In the old regime, up to ₹2 lakh of interest and ₹1.5 lakh of principal (80C) a year can reduce tax. This calculator leaves them out, so add them in your judgement if you use the old regime.
Does the calculator include the joy of owning a home?
No — only money. Security, stability and the freedom to move are real and personal; weigh them alongside the numbers.
What if I would not invest the difference?
Then renting loses much of its edge. The comparison assumes the renter actually invests the money a buyer would spend.
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