Rent vs. Buy Calculator
Compare the estimated net worth of buying a home with renting and investing the difference over the years you choose.
Rent vs. Buy Calculator
Net Worth if You Buy
—
Net Worth if You Rent
—
Buying Minus Renting
—
First Year Buying Leads
—
Monthly Loan Payment
—
Estimated net worth over time
Year-by-Year Comparison
| Year | Monthly rent (₹) | Home value (₹) | Loan balance (₹) | Buy net worth (₹) | Rent net worth (₹) | Buy − Rent (₹) |
|---|
Assumptions & method
- Everything is modelled monthly. The loan is a standard fixed-rate amortising loan: payment = L × i ÷ (1 − (1 + i)^−n), with i = annual rate ÷ 12 and n = term in months. It is paid off if the comparison runs longer than the term.
- Home value grows at the chosen effective annual rate, applied smoothly month by month. Property tax and maintenance are charged each month as a % of the current home value ÷ 12.
- Buying costs are paid at the start. Selling costs are deducted from the sale price when computing buyer net worth, as if you sold at the end of each year shown.
- Buyer net worth = home value × (1 − selling cost %) − loan balance + any money the buyer invests. Renter net worth = the renter's investment portfolio.
- The renter starts by investing the buyer's down payment plus buying costs. Each month, whichever side has the lower housing outlay invests the difference, so both spend the same total amount.
- Rent steps up once a year at the rent growth rate. The investment return is an effective annual rate converted to monthly, (1 + r)^(1/12) − 1, with each month's contribution added at month end. All returns are assumed constant and are not guaranteed.
- Taxes on investment gains, mortgage interest or property deductions, insurance, HOA fees and moving costs are not modelled. Treat the result as an estimate, not a forecast.
Results are estimates based on the figures you enter. They are not guarantees and not financial advice.
Is it better to rent or buy a home?
Buying a home turns rent into a mix of interest, property tax, upkeep and equity. Renting keeps your cash free to invest. This calculator puts both paths on equal footing: each side spends the same total amount on housing every month, and whoever pays less puts the difference into an investment. After the years you choose, it compares what each person would be worth, counting selling costs for the buyer. The year-by-year table and chart show when, or whether, buying overtakes renting. Transaction costs make short stays favour renting. Strong home price growth or rent growth, and long holding periods, favour buying. Use it to test how sensitive the answer is to your assumptions.