How this rent vs buy works
Each month compares rent with EMI plus recurring ownership costs. The renter starts by investing avoided down payment and buying costs; monthly cash-flow differences adjust that portfolio. Buying net worth is property value less loan balance and selling costs.
Worked example
A ₹1 crore home with 20% down is compared with ₹30,000 monthly rent over ten years. Every rate is editable and illustrative.
Try it yourself: the form above starts with these illustrative values. Change any input to see the result and chart update instantly.
Assumptions used
- Investment contributions occur at month end.
- Maintenance and property tax are spread monthly.
- Property value and rent grow at smooth assumed rates.
What this estimate does not cover
- Taxes, liquidity, moving costs and non-financial preferences are excluded.
- Returns and appreciation are hypothetical—not forecasts.
Financial contracts can use day-count, rounding, reset and fee conventions that differ from this educational model. Use your lender’s official schedule for a contractual figure.
Frequently asked questions
Why include the down payment in renter investments?
It is capital the renter did not tie up in the property and is necessary for equivalent starting cash flows.
Does the winner stay the same at every holding period?
No. Transaction costs, compounding, loan amortisation and rent growth can change the comparison over time.
Official references
Regulatory statements are deliberately limited and linked to primary sources. These sources were last reviewed on 3 November 2026.
- RBI: Levy of foreclosure charges / pre-payment penalty on floating-rate term loans — Banks; floating-rate term loans sanctioned to individual borrowers. Always confirm current applicability to the specific loan.
- RBI FAQ: Reset of floating interest rates on EMI-based personal loans — Communication and options around interest-rate resets; home loans fall within the RBI definition of personal loans for this framework.
- RBI consumer guidance on home loans — General borrower education on APR, fees, margin/down payment and lender comparisons. Some examples may be historical; verify lender terms.