Buy vs Rent Analyzer

Compare outcomes • Net Worth Analysis • Data-driven decision

Parameters

Buying Details

Renting Details

Net Worth Comparison Over Time

How to Interpret

This calculator compares the financial outcome of two choices:

  1. Buying a home with a loan.
  2. Renting a similar home and investing the money you save (Downpayment + Difference in EMI and Rent).

If the Rent & Invest net worth is higher, it means your investments outperformed real estate appreciation + rent savings.

The 'Rent & Invest' Rule

Renting often wins financially when rental yields are low (2-3%) but investment returns are high (10-12%). However, buying offers intangible benefits like emotional security, stability, and a forced savings mechanism that this calculator cannot quantify.

Frequently Asked Questions

The calculator compares the future net worth of two scenarios: (1) Buying a house (Asset Value - Outstanding Loan) vs (2) Renting and investing the difference (Savings + Returns). The option with the higher net worth at the end of the tenure is financially better.
When you rent, you save money on down payment and potentially lower monthly outflow (Rent < EMI). We assume you diligently invest these savings. A typical return for a balanced portfolio (Equity + Debt) is 10-12%.
This is a simplified calculator and does not explicitly calculate complex tax benefits like HRA (for renters) or Section 24(b)/80C (for owners), as these vary widely by individual income slabs. However, you can adjust the effective interest rate or rental cost to approximate these benefits.
Homeownership comes with maintenance costs (typically 0.5-1% of property value/year) and property tax. Renting usually shifts major maintenance costs to the landlord. This calculator focuses on the major cash flows: EMI, Rent, and Capital Appreciation.