Rent vs Buy Property Calculator (India)

Formula & Calculation Methodology

Compares future property value against compounding growth of down payment + monthly cash flow difference (EMI - Rent) at SIP CAGR.

Step-by-Step Worked Example

Flat Price: ₹75 Lakhs | Rent: ₹25,000/mo | Loan: 8.5% (20 Yrs) | SIP Return: 12% | Appreciation: 6%

1. Monthly EMI on ₹60 Lakh Loan = ₹52,069 / month
2. BUY Side Net Wealth (Property Value at 20 Yrs) = ₹2.40 Crore
3. RENT Side: Invest ₹15L Down Payment + ₹27,069 Monthly Difference @ 12% SIP
4. RENT Side Net Wealth = ₹4.14 Crore
5. Verdict: Renting and disciplined SIP creates ₹1.74 Crore additional wealth.

The Mathematical Reality of Rent vs Buy in Indian Metros

In major Indian cities like Mumbai, Bengaluru, Delhi NCR, and Pune, residential rental yields are low (2.5% to 3.5%), while home loan interest is 8.5% to 9%.

Renting a home and investing the difference between EMI and rent into diversified equity index funds historically produces substantially higher net worth over 15-20 years.

Frequently Asked Questions