Rent or buy?
“Rent is wasted money” is the advice most of us grew up with. But a home loan's interest, stamp duty and maintenance are costs too. This rent vs buy calculator compares the two fairly: it follows a buyer and a renter with the same monthly budget, assumes the renter invests the down payment and any money left over, and compares their net worth after the number of years you choose.
How to use it
- Enter the home price, down payment and loan terms.
- Enter the rent for a comparable home and how fast rents rise in your area.
- Set the expected home price growth and the return on investments.
Example
An ₹80 lakh flat with 20% down and an 8.5% loan for 20 years costs an EMI of about ₹55,500, while a similar flat rents for ₹25,000. With 5% yearly rent increases, 5% home price growth and a 10% return on investments, after 20 years the buyer is worth about ₹2.1 crore and the renter about ₹3.2 crore — renting and investing wins on these numbers. Raise home price growth to 7% or lower the investment return and the answer can flip. Plan the loan with the EMI calculator and the investing side with theSIP calculator.
Disclaimer: Results are estimates for educational purposes only and are not financial, investment or tax advice. Please verify with your bank, broker or a SEBI-registered adviser before acting. Read the full disclaimer.