🏠 Rent vs Buy
Which option builds more wealth over your horizon.
This compares the long-term wealth outcome of renting (and investing the difference) versus buying a home, accounting for the many hidden costs on both sides that a simple EMI-vs-rent comparison misses.
On the buy side, it factors in the down payment, EMI, property taxes, maintenance, and estimated home appreciation. On the rent side, it assumes the money that would've gone to a down payment and any EMI-rent difference is instead invested, growing at your expected real return (see Real Return & Inflation). The calculator compares final net worth under both scenarios at your chosen time horizon — home equity appears the same way it does in a Net Worth Snapshot.
A 80,00,000 home with a 16,00,000 down payment might have an EMI of 56,000/month, versus renting an equivalent home for 35,000/month. If the 16,00,000 plus the 21,000 monthly difference is invested at 10%, renting can sometimes come out ahead in pure net-worth terms over 10–15 years — though the calculator shows this depends heavily on home appreciation assumptions and how long you stay.
Ignoring maintenance, property tax, and transaction costs (brokerage, registration, stamp duty) on the buy side dramatically understates its true cost, while forgetting to actually invest the rent-side savings (rather than just spending them) invalidates the rent comparison entirely.
What it does
Compares renting versus buying over a chosen horizon on an equal budget, estimating the end wealth of each path.
When to use it
Use it before a housing decision. The answer hinges on your horizon, rent vs mortgage ratio, and what the invested down payment could earn.
Assumptions
- Both paths spend the same budget; the difference is invested at the investment return.
- Ownership costs include maintenance and property tax but not transaction, legal, or insurance costs.
- Rent, home prices, and investment returns grow at constant rates.
Buying usually wins with a long horizon and rent close to the mortgage; renting often wins when the down payment can earn more than home appreciation. Because transaction costs are excluded, be skeptical of a buy advantage smaller than about 10% of the home price.