Rent vs Buy Calculator
Which one leaves you richer, once the invested down payment is counted too.
Whether renting or buying leaves you richer depends on four things: how long you stay, the rent as a share of the price, how home prices grow against what you could earn investing, and the one-off costs. Under about five years buying rarely wins, because stamp duty and brokerage have not been earned back.
How this is calculated
Year-by-year breakdown
The honest rent vs buy calculator for India and the US
Almost every rent vs buy calculator cheats in the same way: it compares rent against an EMI and declares buying the winner because "rent is money down the drain". That ignores the largest number in the comparison, which is what the renter does with the down payment and stamp duty they never spent. Invest that and the picture often flips.
This calculator runs both paths month by month. The buyer's net worth is the home's value, minus selling costs, minus the loan outstanding. The renter's net worth is the down payment plus buying costs, invested from day one, plus every month where renting costs less than owning, also invested. It reports which one is ahead, by how much, and the break-even year where buying overtakes renting.
Worked example: an Rs 80 lakh flat in India
With 20% down, an 8.5% loan over 20 years, rent of Rs 25,000 a month rising 6% a year, 5% price appreciation, 11% investment returns and 7% buying costs, buying is behind after 10 years by a wide margin. The reason is arithmetic, not ideology: Indian rental yields are around 3 to 4%, so renting is cheap relative to the asset price, and the Rs 21.6 lakh of down payment and stamp duty compounding at 11% is a very large head start.
Change the assumptions and the answer changes. Push appreciation to 8%, drop investment returns to 8%, or stretch the horizon to 20 years, and buying wins. That is the point: the answer depends on your numbers, not on a slogan.
| What moves the answer | Favours buying | Favours renting |
|---|---|---|
| How long you stay | Over 7 to 10 years | Under 5 years |
| Rent as a share of price | High rental yield (5%+) | Low rental yield (under 3%) |
| Price growth vs market returns | Appreciation near equity returns | Equities well ahead of property |
| Transaction costs | Low stamp duty and brokerage | High stamp duty (6 to 8% in India) |
What this calculator deliberately does not do
It does not price the things that are not money: the security of a home nobody can ask you to leave, the freedom to move cities in a month, the cost of a landlord who will not fix the geyser. Those are real and they are yours to weigh. What this gives you is the honest financial half of the decision, so you know what the non-financial half is costing you.
Price the loan itself in the mortgage calculator or the home loan EMI calculator, and check your rent exemption in the HRA calculator.
Key facts
| India buying costs | Stamp duty, registration and brokerage typically 6 to 8% of price |
|---|---|
| US closing costs | Usually 2 to 5% of price, plus 5 to 7% to sell |
| Indian rental yield | Typically 3 to 4% of the property's value a year |
| Rule of thumb | Buying rarely wins on a stay of under five years |
| What the calculator credits the renter with | The down payment, the buying costs and any monthly saving, all invested |
How to use the Rent vs Buy Calculator
- Enter the price of the home you would buy and the monthly rent for an equivalent home.
- Set how long you realistically expect to stay. This is the single biggest driver of the answer.
- Set the down payment, loan rate and loan term.
- Set expected home price growth, rent increases and the return you would get investing instead.
- Set upkeep (repairs, insurance, society dues, property tax) and the one-off costs of buying and selling.
- Read which option is ahead, by how much, and the break-even year on the chart.
Sources
Last reviewed and updated: 23 August 2026. Estimates only, not financial or tax advice.
Frequently asked questions
Is it better to rent or buy a house?
It depends on four things: how long you will stay, the rent as a share of the price, how home prices grow against what you could earn investing, and the one-off costs of buying and selling. Under about five years, buying almost never wins because stamp duty, registration and brokerage have not been earned back. Over ten years, buying usually pulls ahead unless rental yields are very low.
What is the break-even point for buying a house?
The year in which the buyer's net worth, meaning the home's value minus selling costs and the outstanding loan, overtakes the renter's invested portfolio. In India with 6 to 8% stamp duty and 3 to 4% rental yields it is often well past ten years; in the US with 3% closing costs and higher rental yields it is typically five to seven.
Why does this calculator say renting can win?
Because it credits the renter with investing the down payment and the buying costs, which is what an honest comparison requires. If you would not actually invest that money, buying is the better choice for you, since a mortgage is forced saving. The calculator assumes discipline; be honest about whether you have it.
Does the calculator include stamp duty and registration?
Yes, through the cost of buying input, which defaults to 7% for India, covering stamp duty, registration and brokerage, and 3% for the US, covering closing costs. Selling costs default to 2% in India and 6% in the US, where agent commission is higher.
Should I include the tax benefit on a home loan?
This calculator does not add it, so the buying case shown is slightly conservative for old-regime taxpayers in India who can claim Section 24(b) interest and 80C principal. Under the new regime, which most people are now on, there is no deduction for a self-occupied property, so no adjustment is needed.
Is this rent vs buy calculator free?
Yes, free with no sign-up or ads, for both India and the US.