Live Trend Go
Banking & LoansReal Estate

Rent vs. Buy Real Estate Decider

Compare total net worth after 10–20 years between buying a home on EMI vs. renting and investing savings into mutual funds.

  • Runs entirely in your browser
  • No sign-up, nothing stored
  • Formula explained below

Your scenario

Buy with a home loan, or rent and invest what you would have spent.

The home
₹
₹20L₹3Cr
%
10%₹15,00,00040%
%
2%12%
Home loan
%
6%15%
yrs
5 yrsAlso the comparison period30 yrs
Renting and investing
₹
₹5K₹1L
%
1%10%
%
8%18%
After 20 years, renting + investing is ahead by
₹1,66,88,765

Assuming 5% property appreciation vs. 12% returns on the invested down payment and monthly savings.

Buy: home value (yr 20)
₹1,98,99,733
Rent: portfolio (yr 20)
₹3,65,88,498
Monthly EMI
₹52,069

Net worth by year

Buying: home value minus the loan still owed. Renting: the invested down payment plus monthly savings.

  • Buy
  • Rent + invest
Renting + investing stays ahead in every year
Rent overtakes the cost of owning (₹55,194 a month) in year 20. From then on the renter has nothing left to invest and draws on savings to cover the gap.

What buying costs you

Everything a buyer pays over 20 years, before the home's appreciation.

  • Home price50.9%₹75,00,000
  • Loan interest44.1%₹64,96,655
  • Maintenance5.1%₹7,50,000

Buying (homeowner)

Monthly EMI
₹52,069/mo
Down payment (today)
₹15,00,000
Loan amount8.5% for 20 years
₹60,00,000
Interest paid on the loan
₹64,96,655
Maintenance0.5% of the price a year
₹7,50,000
Net property worth (year 20)
₹1,98,99,733

Renting + investing

Better outcome
Initial rentRising 5% a year
₹22,000/mo
Total rent paid
₹87,29,412
Down payment compounded at 12%
₹1,44,69,440
Monthly savings investedEMI + maintenance − rent, each month
₹2,21,19,058
Net mutual fund portfolio (year 20)
₹3,65,88,498

Monthly housing cost

Owning stays flat while rent rises 5% a year and overtakes it in year 20.

  • Owning (EMI + maintenance)
  • Rent

Year-by-year comparison

Rent, home value, loan owed and each path's wealth at the end of every year.

YearMonthly rentHome valueLoan owedBuy · net worthRent + invest · portfolioAhead
Year 1₹22,000₹78,75,000₹58,80,586₹19,94,414₹21,05,198Rent
Year 2₹23,100₹82,68,750₹57,50,617₹25,18,133₹27,71,831Rent
Year 3₹24,255₹86,82,188₹56,09,161₹30,73,027₹35,06,840Rent
Year 4₹25,468₹91,16,297₹54,55,200₹36,61,097₹43,17,990Rent
Year 5₹26,741₹95,72,112₹52,87,631₹42,84,481₹52,13,977Rent
Year 6₹28,078₹1,00,50,717₹51,05,250₹49,45,467₹62,04,538Rent
Year 7₹29,482₹1,05,53,253₹49,06,749₹56,46,504₹73,00,579Rent
Year 8₹30,956₹1,10,80,916₹46,90,702₹63,90,214₹85,14,318Rent
Year 9₹32,504₹1,16,34,962₹44,55,558₹71,79,404₹98,59,448Rent
Year 10₹34,129₹1,22,16,710₹41,99,629₹80,17,080₹1,13,51,314Rent
Year 11₹35,836₹1,28,27,545₹39,21,079₹89,06,466₹1,30,07,120Rent
Year 12₹37,627₹1,34,68,922₹36,17,908₹98,51,015₹1,48,46,157Rent
Year 13₹39,509₹1,41,42,369₹32,87,939₹1,08,54,430₹1,68,90,058Rent
Year 14₹41,484₹1,48,49,487₹29,28,803₹1,19,20,684₹1,91,63,086Rent
Year 15₹43,558₹1,55,91,961₹25,37,924₹1,30,54,038₹2,16,92,461Rent
Year 16₹45,736₹1,63,71,559₹21,12,494₹1,42,59,065₹2,45,08,722Rent
Year 17₹48,023₹1,71,90,137₹16,49,460₹1,55,40,677₹2,76,46,139Rent
Year 18₹50,424₹1,80,49,644₹11,45,498₹1,69,04,146₹3,11,43,171Rent
Year 19₹52,946₹1,89,52,126₹5,96,991₹1,83,55,136₹3,50,42,983Rent
Year 20₹55,593₹1,98,99,733₹0₹1,98,99,733₹3,65,88,498Rent
Owning costs ₹55,194/mo all along (EMI + 0.5% maintenance)Buy net worth = home value − loan owed

Renting vs. buying in India: what the numbers say

In major Indian cities such as Mumbai, Bengaluru, Delhi NCR and Pune, the rental yield on homes is typically only 2.5% to 3.5% a year, while home loan rates are around 8.5% to 9%.

Buy = P × (1 + a)ⁿRent = D × (1 + r)ⁿ + S
P
Property price (the loan is fully repaid after n years)
a
Property appreciation per year
D
Down payment, invested instead of spent
r
Investment return per year
S
Savings corpus: EMI + maintenance − rent, invested monthly
n
Loan tenure in years

The opportunity cost of the down payment. A ₹20 lakh down payment invested in an equity index fund at 12% compounds to nearly ₹1.93 crore in 20 years without any further contribution.

What does this comparison leave out?
Stamp duty, registration and brokerage on the purchase, home loan tax benefits, the rental security deposit, and the security of owning your home. Add these to your own decision.
What happens when rent becomes higher than the EMI?
The renter stops adding to investments and covers the gap from the savings built so far. The buyer's EMI stays fixed, which is why long horizons and high rent growth favour buying.
How do I check the EMI on the loan?
Use the EMI calculator for the full repayment schedule of the loan used here.

Keep planning

All 21 calculators
FD Calculator

Calculate Fixed Deposit interest payout and maturity amount with quarterly compounding.

RD Calculator

Calculate Recurring Deposit maturity value and interest with monthly deposits.

EMI Calculator

Calculate monthly EMI, total interest, and complete amortization schedule for Home, Car, or Personal Loans.

Home Loan Prepayment

Calculate total interest saved and tenure reduction through extra monthly or yearly loan prepayments.