Rent vs Buy Calculator for India
Kedil's rent vs buy calculator compares buying a home on a loan against renting and investing the difference, using a post-tax net wealth method. Enter your city, property price, loan, rent and tax regime. It returns the wealth gap over 10 to 30 years and the year buying overtakes renting.
What your result means
The headline number is net wealth at the end of your horizon. Buying is what the property is worth minus what you still owe. Renting is your invested corpus after long-term capital gains tax.
Below it sits the number that actually settles the argument: the break-even year. That is the year buying overtakes renting and stays ahead. If it reads “never within your horizon”, the gap is not going to close by waiting.
If the two sides land within a year of your income, treat it as a tie. At that point commute, job security and whether your family wants to stay put are better tiebreakers than the spreadsheet.
How we calculate this
Method: post-tax net wealth comparison. Both paths run to the same end year, then get compared once.
Buy side. You pay the down payment plus stamp duty on day one, then EMI and maintenance every month. Maintenance rises each year. Net wealth is the property value minus the outstanding loan balance.
Rent side. You invest that same day-one amount instead, then SIP any monthly surplus of EMI plus maintenance minus rent. Rent rises each year. Net wealth is the corpus after LTCG.
Buy net wealth = property value − outstanding loan Rent net wealth = invested corpus − LTCG Day-one investment = down payment + stamp duty Monthly SIP = EMI + maintenance − rent Break-even year = first year buy net wealth stays above rent net wealth
- Property price
- What you pay before registration, not the all-in cost.
- Down payment
- The percentage you fund yourself. The rest is the loan.
- Interest rate
- Your expected floating home-loan rate.
- Tenure / horizon
- Loan term, and how long you compare. Horizon can be shorter.
- Appreciation
- Annual property growth for your city. Defaults follow NHB RESIDEX.
- Rent
- Current monthly rent for a comparable home, rising each year.
- Investment return
- Pre-tax annual growth on the renter's money. Moderate is 12%.
- Tax regime
- Section 202 is the default. Opting for the old regime allows eligible Section 22 interest, Section 123 principal and HRA relief.
Sources: NHB RESIDEX for city appreciation, checked 5 September 2026. Income Tax Department: the Income-tax Act, 2025, Section 22 for interest, Section 123 read with Schedule XV for principal, and Sections 202, 11 with Schedule III, and 198 for the default regime, HRA and equity LTCG. Income-tax Rules, 2026 for HRA limits. Tax references checked 9 October 2026 for FY 2026–27. Nifty 50 TRI rolling returns for the investment presets. State government notifications for stamp duty.
Assumptions
Checked 5 September 2026.
Property appreciation
Applied annually to the purchase price. City defaults follow NHB RESIDEX; the 50-city composite rose 5.0% year-on-year in the quarter ending December 2025.
Investment growth
Conservative 9%, moderate 12%, aggressive 15%. Nifty 50 TRI returned 12.44% annualised over the 20 years to February 2026 — but its 20-year rolling CAGR recently fell below 10%, so treat 12% as a mid-case, not a floor.
LTCG
12.5% on eligible equity long-term gains above ₹1,25,000 a year under Section 198 of the Income-tax Act, 2025, applied once at the horizon.
Tax
Rules apply to FY 2026–27 (1 April 2026 to 31 March 2027) under the Income-tax Act, 2025. Section 202 is the default new regime: no self-occupied interest deduction, principal deduction or HRA exemption. Under the old regime, Section 22(2)(a) allows eligible self-occupied interest up to ₹2,00,000 a year in aggregate, provided purchase or construction finishes within five years of the end of the borrowing tax year and the lender supplies an interest certificate. Otherwise, the Section 22(2)(b) cap is ₹30,000. Eligible housing-loan principal under Section 123 read with Schedule XV shares a ₹1,50,000 annual limit with other qualifying payments, such as provident-fund contributions and life-insurance premiums. Schedule XV requires a qualifying lender and reverses earlier deductions if the home is transferred before five years from the end of the tax year in which possession was obtained. HRA under Section 11 read with Schedule III, entry 11, is subject to the least-of limits described in the FAQ. The calculator assumes eligibility and the full principal limit is available. Its HRA estimate assumes HRA received is 50% of basic salary and uses preset city bands, so it may differ from your eligible exemption under the current rules.
Stamp duty
City defaults from state notifications, editable. Tamil Nadu is 11% all-in; Karnataka is nearer 7%.
Not modelled
Rental deposit, interiors, property tax, home insurance, brokerage, selling costs, and LTCG on the property if you sell.
An example
Kavya is 35, works in IT in Chennai, and takes home ₹2,00,000 a month. She rents for ₹27,000 and is looking at a ₹1 crore flat. She can put 20% down, gets 8.5% for 20 years, and files under the new regime. Tamil Nadu charges 7% stamp duty plus 4% registration, so ₹11,00,000 goes to the government on day one.
Her EMI is ₹69,426. With ₹4,000 maintenance, owning costs ₹73,426 a month against ₹27,000 rent — a surplus of ₹46,426 that she would invest if she kept renting.
After 20 years the flat is worth ₹3.21 crore with the loan closed. The invested corpus, after LTCG, is ₹4.95 crore. Renting wins by ₹1.74 crore, and buying never breaks even inside 20 years. That gap is wide enough to survive being wrong about the assumptions. A closer one would not be.
What changes the result
Your tax regime
For FY 2026–27, Section 202 of the Income-tax Act, 2025 is the default new regime. It excludes Section 22 relief on self-occupied home-loan interest, Section 123 principal deductions and HRA exemption under Section 11 read with Schedule III. Under the old regime, eligible buyers can deduct interest up to ₹2,00,000 and principal within the shared ₹1,50,000 Section 123 limit, subject to the conditions above. Eligible renters can claim HRA. The tax-regime toggle applies the calculator’s old-regime assumptions.
The rent-to-EMI gap
If EMI plus maintenance runs past about 1.5 times your rent, the monthly surplus is large, and twenty years of investing it is usually what decides the comparison. The property price matters less than the gap between the two monthly numbers.
Property appreciation
NHB RESIDEX put the 50-city composite at 5.0% year-on-year for the quarter ending December 2025. Bengaluru ran 12.7% and Chennai 8.2%, but Hyderabad managed 3.2% and Pune 3.5%. Picking a rate because a neighbour sold well is the fastest way to talk yourself into a purchase.
How long you actually stay
Stamp duty is sunk the day you register, and the early EMIs are mostly interest. Both take years to absorb. A three or five year horizon almost always favours renting, however well the city is appreciating.
What happens if the income stops
A 20-year EMI assumes 20 years of salary. Rent adjusts in a month; an EMI does not. Model a shorter horizon and see what you would be left holding.
What people get wrong
How to use
- 1Enter your current rent and the property price you are considering.
- 2Set your down payment percentage and expected home loan interest rate.
- 3Add the property appreciation rate for your city.
- 4Choose an investment return assumption for the rent + invest scenario.
- 5Set your time horizon and tax regime, then review the net wealth comparison.
Frequently asked questions
Should I buy a house or rent and invest in India in 2026?
It depends on your city, the price, and how long you will stay. As a rule, if EMI plus maintenance exceeds about 1.5 times equivalent rent and you may move within ten years, renting and investing the difference usually ends ahead. Run your own numbers — the break-even year is the output that settles it.
How many years must I stay before buying beats renting?
Usually more than ten. Stamp duty is sunk on day one and early EMIs are mostly interest, so both take years to absorb. Kedil's calculator shows the exact break-even year for your inputs, or tells you buying never overtakes renting inside your horizon.
Do Section 22 and Section 123 home loan benefits apply under the new tax regime?
No. For FY 2026–27, the Income-tax Act, 2025 makes the new regime the default under Section 202. It excludes Section 22 interest relief for self-occupied property and Section 123 deductions for principal repayment. Under the old regime, eligible interest has a ₹2,00,000 annual cap, and eligible principal repayments fall within the shared ₹1,50,000 limit under Section 123 read with Schedule XV.
Does HRA make renting cheaper than buying?
Only under the old regime. HRA exemption under Section 11 read with Schedule III, entry 11, is unavailable under the default Section 202 regime. For FY 2026–27, the Income-tax Rules, 2026 set the salary-based ceiling at 50% in Mumbai, Kolkata, Delhi, Chennai, Hyderabad, Pune, Ahmedabad and Bengaluru, and 40% elsewhere. The exemption is the least of actual HRA received, rent paid minus 10% of salary, and that salary-based ceiling.
What is the 20-30-40 rule for buying a house?
Put 20% down, keep EMI under 30% of monthly income, and still save 40% of income after it. It is an affordability test, not a rent-versus-buy test. Passing it means you can carry the loan; it says nothing about whether buying builds more wealth than renting.
Is 3.6% rental yield good in India?
It is about average. Rental yield is annual rent divided by property price. Indian metros mostly run 2–4%; Mumbai sits near 3.8% and Chennai near 4.9%. A low yield means prices have outrun rents, which usually strengthens the case for renting in that city.
What property appreciation rate should I assume for my city?
Use your city, not a national number. NHB RESIDEX for the quarter ending December 2025 put Bengaluru at 12.7%, Chennai at 8.2%, Kolkata at 6.7%, Mumbai at 3.7%, Pune at 3.5% and Hyderabad at 3.2%, against a 50-city composite of 5.0%. Kedil defaults to five-year averages.
What if I lose my job in year three?
Rent can be renegotiated or ended in a month. An EMI cannot, and the down payment is locked in the property. The calculator does not model an income stop directly — set a shorter horizon to see what each side leaves you if the plan ends early.
Last updated 9 October 2026 · Formula sources: NHB RESIDEX · Income Tax Department · Nifty 50 TRI