The Buy vs Rent Calculator answers the biggest financial dilemma: Is it better to pay EMI and build an asset, or pay Rent and invest the surplus? In India, where rental yields are low (2-3%) and loan interest rates are high (8-9%), the math often surprises people.
The Math Behind Buying vs Renting
This calculator compares the Net Worth of two scenarios after N years:
1. Buying: Property Value - Outstanding Loan. We account for EMI, Down Payment, Maintenance, and Property Appreciation.
2. Renting: Value of Investments. We assume you invest the Down Payment and the monthly difference (EMI - Rent) in equity/mutual funds.
The Breakeven Year is when the Net Worth of Buying exceeds Renting. If you plan to stay less than this period, Renting is usually better.
Example: ₹75 Lakh Property
Scenario: You buy a ₹75L flat with ₹15L down payment and ₹60L loan (20 years @ 8.5%). Comparison with Renting @ ₹25k/month and investing surplus @ 12%.
• Year 5: Renting wins (Investment grows faster than property equity).
• Year 13: Breakeven Point. Buying starts winning.
• Year 20: Buying wins significantly as loan ends and you own the asset fully.
Frequently Asked Questions
⚠️ Disclaimer
The figures provided by this calculator are estimates based on the inputs you provide and standard financial formulas. STOCKCALC.IN does not offer investment advice. Please consult a qualified financial advisor before making any investment decisions.