Buy vs Rent Calculator — Should You Buy or Rent?
Reviewed by Finin2min Editorial Desk · Last Reviewed 12 September 2026
2-minute answer
Buy vs rent calculator for India. Compare total cost of ownership using price-to-rent ratio. Real numbers for Mumbai, Delhi, Bengaluru, Pune and more.
How to use this page
Buy vs Rent Calculator — Should You Buy or Rent? is best used as a structured decision tool. Enter or compare like-for-like inputs, make the assumptions explicit and test a downside case before relying on the output.
Practical checklist
- Use inputs from dated statements, contracts or operating records instead of rough estimates where possible.
- Keep units and periods consistent (monthly vs annual, pre-tax vs post-tax, nominal vs real).
- Run at least one conservative scenario and identify the assumption that drives the result most.
- Use the result as screening evidence and document any professional or legal adjustment separately.
Worked use case
Example: if one assumption changes the answer materially, show that variable as a range instead of presenting a single-point result as certain.
Official sources
Related Finin2min guidance
Reviewed for currentness: 12 September 2026. Educational/professional reference; the controlling law, notification, order or official filing instruction prevails.
Page content
🏠 Buy vs Rent Calculator — DCF Analysis
📊 Net Position Over Time
⚖️ Buy vs Rent — Cost Breakdown
| Item | BUY | RENT |
|---|---|---|
| Initial Outflow | — | — |
| Monthly Payment | — | — |
| Total Payments (nominal) | — | — |
| Maintenance Cost | — | Nil |
| Annual Tax Benefit | — | — |
| Opportunity Cost of Down Payment | — | Nil (invested) |
| Asset Value at End | — | ₹0 |
| NET POSITION | — | — |
🔬 Sensitivity — Break-Even by Appreciation Rate
How to Use the Buy vs Rent Calculator
Enter the property price, your expected down payment, home loan interest rate and tenure for the "Buy" scenario, plus your current monthly rent and expected annual rent escalation for the "Rent" scenario. Add assumptions for property appreciation, maintenance costs and the return you could earn by investing the down payment and EMI-rent difference instead (e.g. via an SIP). The calculator projects net wealth under both scenarios over your chosen time horizon and tells you which option builds more wealth — along with the break-even point.
Buy vs Rent: How the Comparison Works
Rent Net Worth = Investment Corpus (down payment + EMI−Rent surplus, compounded) − Total Rent Paid
Verdict = Compare Buy Net Worth vs Rent Net Worth at end of horizon
The decision is highly sensitive to property appreciation rate, rent escalation, and the return assumed on invested surplus — small changes to these inputs can flip the verdict, so it's worth testing a few scenarios. See the Buy vs Rent in India 2025 guide for a detailed worked example.
Price-to-Rent Ratio: India's Major Cities (2025)
| City | Avg P/R Ratio | Rental Yield | Verdict |
|---|---|---|---|
| Mumbai (Central) | 40–50× | 2–2.5% | Rent |
| Bengaluru | 28–35× | 2.8–3.5% | Lean Rent |
| Hyderabad | 22–28× | 3.5–4.5% | Neutral |
| Pune | 20–25× | 4–5% | Neutral |
| Ahmedabad / Jaipur | 12–18× | 5.5–8% | Buy |
P/R = Property Price ÷ Annual Rent. Below 15: favour buying. 15–20: neutral. Above 20: renting typically more efficient. Source: estimates based on 2025 residential market data.
Frequently Asked Questions
Related Calculators
Methodology, assumptions and sources
Scope: Compares the total cost of buying a home (via EMI, plus ownership costs, minus equity built and appreciation) against renting an equivalent property over the same horizon, to estimate the financial break-even point.
Calculation logic
- Buy scenario: compute the EMI using the standard reducing-balance formula, add property tax, maintenance and other ownership costs, and net off the equity built via principal repayment plus assumed property appreciation.
- Rent scenario: project rent with the entered annual escalation rate, and assume the amount not spent on a down payment/EMI difference is invested at the entered return rate.
- Compare the net cost (or net wealth) under each scenario at the end of the selected horizon to determine which option is cheaper and by how much.
Inputs and assumptions
- Property appreciation and rent escalation rates are user-entered assumptions, not guaranteed or predicted values.
- Opportunity cost of the down payment is modelled by assuming it would otherwise be invested at the entered rate of return.
Exclusions and edge cases
- Does not model resale/exit transaction costs (brokerage, stamp duty on subsequent sale) unless entered.
- Tax benefits on home loan interest/principal are approximate and depend on the tax regime selected.
Sources
No external regulatory source applies — this is a general financial formula, not a statutory computation.
Review status: reviewed and approved by CA Nikhil Gupta on 3 June 2026.